A federal housing program was gutted in February, taking $60 million away from organizations across the country. One community group in particular, in Detroit, says it is worried about meeting the demand.
The U.S. Department of Housing and Urban Development cut funding for its Capacity Building for Affordable Housing and Community Development Program, also known as Section 4, in early 2025. The funding supported building grants and technical assistance programs.
After pushback, it reinstated $20 million for select grants that go to local housing and community development organizations but has remained silent on the remaining $40 million, according to the online news site Multifamily Dive. That has many organizations worried about financial constraints moving forward.
Launched in 1993 as part of the HUD Demonstration Act, the program gives funds to housing nonprofits and development groups that provide assistance and homes for buyers and renters.
The Detroit-based Grandmont Rosedale Development Corp. depended on that funding to support staff salaries, materials for the organization’s housing projects and home repairs for residents, Mike Randall, the organization’s executive director, said in an interview.
Since 1989, Grandmont has developed homes for sale and apartments, made home repairs and provided workspace for small business owners to residents in five communities within the northwestern neighborhoods of Detroit, including Grandmont and Rosedale. Randall said the funding wasn’t much — he declined to confirm this year’s Section 4 allotment — but said it made a difference.
“What’s more important is these funds, which are not a lot, are really important for community corporations to do the work,” Randall said. “When there are drastic funding cuts like this, it creates an environment of uncertainty where a lot of our programs are threatened.”
Homes News contacted HUD to confirm how much funding had been cut and which cities were hit the hardest. “For any Section 4 grant that was determined not to be in compliance with recent executive orders, HUD has provided a process to appeal decisions and look forward to receiving and evaluating those appeals,” a spokesperson said via email.
Rep. Rashida Tlaib, Democrat of Michigan, told the House Committee on Financial Services and Subcommittee on Oversight and Investigations on April 8 that Detroit faces serious concerns.
“The housing crisis continues to exacerbate,” Tlaib said. “Canceling Section 4 funding threatens hundreds of housing projects around our nation right now.”
More cuts are under consideration.
"At HUD we’re taking inventory of every program, so every program at HUD is being reevaluated," Secretary Scott Turner said during the Mortgage Bankers Association’s National Advocacy Conference last week. "It's helping us to carry out our mission or, if not, is it causing us to succeed? If not, then we’re not comfortable with it.”