A proposed rule, issued by Office of Management and Budget (OMB) and more than 40 agencies (including HUD), would revise government-wide policies and requirements related to Federal Financial Assistance, including grants, cooperative agreements, and other forms of assistance.
What are the Proposed Changes?
- New funding restrictions & priorities: Federal grants would be barred from supporting DEI/DEIA or “gender ideology” activities and an expansion of protections for faith-based organizations.
- Changes to civil rights enforcement: Proposed limits on disparate-impact enforcement under federal anti-discrimination frameworks.
- Stronger domestic purchasing preferences: Agencies would be required to evaluate use of domestic sourcing preferences for non-infrastructure grants where feasible and legally permitted.
- Stricter compliance requirements: E-Verify screening to ensure only American citizens receive the money, English-language only requirements for funding materials, and accelerated referral of fraud allegations to inspectors general and prosecutors rather than agencies handling investigations internally.
- Shift in oversight & control: Greater authority for political appointees over grant approvals and monitoring, with reduced agency flexibility to set exemptions or tailor requirements.
By the Numbers: The proposed rule could impact up to $1 trillion in federal funding.
What’s Next: Comments are due July 13, 2026. OMB proposes to issue a final rule that is effective by October 1, 2026.
Why This Matters: The proposed rule would expand OMB’s discretion to intervene in grant programs and withhold funding. For affordable housing providers reliant on grants, the proposal could increase compliance burden and funding uncertainty, making projects harder
