Public Housing Capital Fund

ARRA allocates $5 billion for the public housing capital fund, not less than $4 billion to be allocated using the current capital fund formula, and up to $1 billion to be bid competitively.

For the funding (not less than $4 billion) to be allocated by the capital fund formula, housing authorities in receipt of their formula share of the funds are required to give priority consideration to:

  • Projects already underway or that are included in housing authority 5 year plans;

  • Projects that may be awarded contracts based upon bids within 120 days from the date of the funds is made available to PHAs; and/or

  • Rehabilitating vacant units.

For the funding (not more than $1 billion) that HUD may competitively bid out to housing authorities, the following activities may be included:

  • investments that leverage private sector funding for housing renovations;

  • investments that leverage private sector funding for energy retrofit investments;

  • rehabilitation using sustainable materials or are designed for energy efficiency;

  • rehabilitation that preserves units with good access to public transportation and employment centers;

  • investments that fill capital investment gaps for projects that have been approved or are otherwise ready to proceed, but stalled due to the inability to obtain anticipated private capital;

  • rehabilitation that brings vacant units into use; or

  • investments that address the needs of seniors and persons with disabilities through improvements to housing and facilities that attract or promote the coordinated delivery of supportive services.

Neighborhood Stabilization Program

The Neighborhood Stabilization Program (NSP) is a program originally included in the Housing and Economic Recovery Act of 2008 (HERA), which allocated funds to states and local governments to address neighborhood destabilization created by foreclosed-upon homes and residential properties. ARRA includes an additional $4.19 billion in funding for neighborhood stabilization (NSP II).

There are some differences between the statutory language for NSP and NSP II.  Under NSP, the only permissible grantees were states and units of local government, while NSP II is open to nonprofits. NSP funds were allocated by a formula, while NSP II funds will be allocated by competitive bid process.

Of the $4.19 billion allocated for NSP II,

  • Not less than $3.44 billion shall be allocated by a competition among states, local governments, and nonprofit entities. The permitted uses are similar to NSP but focus more narrowly on foreclosed properties.

  • Up to $750 million is to be awarded by competition to nonprofit entities or consortia of nonprofit entities. These funds are to be used for community stabilization activities, primarily in states with areas of high rates of defaults and foreclosures.

ARRA repeals the portion of the statute for the NSP statute that deals with program income and that requires all revenue generated from eligible uses, except for a reasonable developer fee, be returned to the grantee for the grantee’s re-use for a five year period.


ARRA includes $1 billion for the CDBG program. The funds will be allocated by HUD using the FY 2008 funding formula. Local government units do not need to prepare an additional action plan. Priority must be given to projects that can be bid within 120 days from the date funds are made available to recipients.


The legislation includes $1.5 billion for the HOME program. The funds will be allocated using the FY 2008 funding formula. Jurisdictions must give priority to projects that can be bid within 120 days from the date funds are made available to recipients.

Home less Assistance Grants

ARRA includes $1.5 billion for the emergency shelter grant program. In addition to the homeless prevention activities permitted under the emergency shelter grant program, funds may be used for various homeless prevention activities, including short-term rental assistance, housing search assistance, mediation or outreach to property owners, legal services, and credit repair services, among other uses.

Elderly, Disabled, and Section 8 Assisted Housing Energy Retrofit

The legislation allocates $2.5 billion for energy retrofit investments for existing Section 202, Section 811, and projects with Section 8 subsidies.

  • Owners must have a "satisfactory" or higher management review rating.
  • Owners must accept an additional affordability covenant.
  • Efficiency incentives will be available upon completion of the energy retrofit investments.


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