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Event / Action Date:Sep 4, 2026
HUD has released $255.5 million in fiscal year 2026 Housing Trust Fund allocations, establishing how much each state, the District of Columbia and five U.S. territories will receive to support housing for extremely low-income households.
The allocation notice was published in the Federal Register on September 4. It distributes a total of $255,516,650.92 among 56 eligible grantees.
For affordable-housing developers, housing agencies and nonprofit organizations, the notice is the starting signal for another round of state-level funding decisions.
The Housing Trust Fund was created to increase and preserve housing for households with the lowest incomes.
Its principal purpose is to support rental housing for extremely low-income households earning no more than 30 percent of area median income. The program can also serve very low-income households, including families experiencing homelessness, and may support certain homeownership activities.
Unlike many HUD programs funded through annual congressional appropriations, the Housing Trust Fund receives money connected to new mortgage purchases by Fannie Mae and Freddie Mac.
Federal law requires the two enterprises to set aside 4.2 basis points of the unpaid principal balance of their new mortgage purchases. Sixty-five percent of that set-aside is directed to the Housing Trust Fund, with the remainder going to the Capital Magnet Fund.
HUD then distributes the Housing Trust Fund portion through a statutory formula.
California received the largest FY 2026 allocation at approximately $28.23 million.
The next-largest awards are:
New York: $17.99 million
Texas: $12.10 million
Florida: $10.90 million
Illinois: $8.07 million
New Jersey: $7.44 million
Pennsylvania: $7.12 million
Georgia: $5.78 million
North Carolina: $5.64 million
Massachusetts: $5.52 million
Ohio received approximately $5.51 million, Washington received $5.13 million and Michigan received $5.05 million.
The District of Columbia received $3 million. Puerto Rico received approximately $902,616, while allocations for American Samoa, Guam, the Northern Mariana Islands and the U.S. Virgin Islands were smaller.
HUD noted that the Virgin Islands’ $70,897.89 allocation remains subject to the suspension of the Virgin Islands Housing Finance Authority.
The Federal Register notice announces how much each eligible grantee will receive. It does not open a national application directly to property owners or developers.
Each state identifies an agency to administer its Housing Trust Fund allocation. That agency establishes its funding priorities, application requirements and project-selection criteria through an annual HTF allocation plan.
The plan must explain how the state intends to distribute the money and how proposed projects will be evaluated.
Depending on the state, funds may be awarded through a competitive application, incorporated into a broader affordable-housing funding round or paired with programs such as Low-Income Housing Tax Credits and HOME funds.
Developers should therefore look beyond the federal publication date. The important local dates will be the state’s allocation-plan process, public-comment period and application deadline.
States can now finalize or amend their annual action plans to incorporate their FY 2026 Housing Trust Fund awards.
HUD guidance states that an HTF allocation plan must be included in the state’s Consolidated Plan. If a state submitted its plan for other Community Planning and Development programs before the HTF allocation was published, it may need to add the HTF plan through a substantial amendment.
The allocation plan must identify the state’s method of distribution and its requirements for selecting applications from local governments, nonprofit organizations, developers or other eligible recipients.
That creates an important window for housing organizations to review proposed priorities and participate in public-comment opportunities before funding decisions are finalized.
The September 4 notice provides exact award amounts, but it does not guarantee when each state will begin accepting applications.
Organizations pursuing HTF funding should identify the administering agency in their state and begin monitoring its notices, board materials and annual action-plan amendments.
Potential applicants should also review whether their proposed development can satisfy the program’s income targeting, affordability, eligible-cost and long-term compliance requirements.
Projects that combine HTF money with tax credits or other federal funding may need additional underwriting, environmental review and subsidy-layering coordination.
Waiting for the application to open can leave too little time to assemble site-control documents, development budgets, financing commitments and evidence of local need.
The strongest position is to prepare the project while the state is finalizing its funding process.
HUD’s new allocation notice puts more than a quarter-billion dollars into the affordable-housing pipeline.
The money will not solve the national shortage of deeply affordable housing. But for developments serving households with extremely limited incomes, Housing Trust Fund dollars can fill financing gaps that conventional debt and tax-credit equity cannot cover.
The federal amounts are now public. The next decisions will happen at the state level.
* Confirm your state’s FY 2026 Housing Trust Fund allocation. * Identify the state agency responsible for administering HTF money. * Monitor the state’s annual action plan and any substantial amendment. * Watch for public-comment periods and application announcements. * Review the state’s project-selection criteria before finalizing a proposal. * Confirm income-targeting, eligible-cost and affordability requirements. * Begin assembling site control, budgets, financing commitments and evidence of housing need. * Do not treat the federal allocation notice as a direct application or funding award to individual projects.
HUD’s $255.5 million Housing Trust Fund allocation puts new federal housing dollars into the hands of states, but the funding does not go directly to individual developments. For developers, housing agencies and nonprofits, the key decisions now shift to the state level, where agencies will determine funding priorities, application timelines and project-selection criteria. Organizations hoping to compete for FY 2026 HTF dollars should begin tracking their state’s allocation plan and preparing projects before application windows open.
State housing agencies, affordable-housing developers, nonprofit housing organizations, public housing agencies, lenders, tax-credit partners and households with extremely low or very low incomes.
HUD's recent announcement of $255.5 million in Housing Trust Fund allocations for fiscal year 2026 marks a significant federal investment aimed at supporting extremely low-income households across the U.S. However, the funds will be distributed at the state level, requiring developers, housing agencies, and nonprofits to engage with state agencies to navigate funding priorities and application processes. Organizations interested in these resources must proactively prepare and align their projects with state-specific criteria to compete effectively for the available funding.
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