The Section 4 Capacity Building for Community Development and Affordable Housing program, detailed in the Notice of Funding Opportunity (NOFO), offers funding to enhance the capacity of Community Development Corporations (CDCs) and Community Housing Development Organizations (CHDOs) in delivering affordable housing and community development activities. For FY 2024, approximately $42,000,000 is available, with at least $5,000,000 earmarked for rural capacity-building initiatives and a $1,000,000 minimum investment allocated to benefit Native Hawaiian, American Indian, and Alaska Native communities. These funds aim to strengthen the ability of organizations to serve low- and moderate-income families, align with HUD’s strategic goals, and address priorities such as fair housing, environmental justice, and economic recovery.

Only three national nonprofit organizations—Enterprise Community Partners, Local Initiatives Support Corporation, and Habitat for Humanity International—are eligible to apply directly for funding. These entities may provide technical and financial assistance to local CDCs and CHDOs, enabling them to improve administrative and technical skills, engage in fair housing and consolidated planning, and participate in regional planning for sustainable economic development. Eligible activities include training, technical assistance, direct financial aid, and administrative functions directly related to the Section 4 program's objectives.

Applications must include standard federal forms (e.g., SF-424), budget details using HUD Form-4130, narratives responding to the NOFO's rating factors, and required certifications such as nonprofit status. Submissions must adhere to format and content guidelines, including a maximum of 40 single-spaced narrative pages. Responses must address five rating factors: organizational capacity, identified needs of CDCs and CHDOs, the soundness of approach, leveraging resources, and program evaluation. Applicants must demonstrate how they will meet match funding requirements, as each federal dollar must be matched by three dollars from private sources.

Applications will be evaluated using a scoring system, with a minimum of 75 points required to be considered for funding. Additional preference points may be awarded for advancing environmental justice or aligning with Promise Zone goals. HUD reviewers will assess the proposals based on their ability to address community needs, promote equity, and effectively implement proposed activities. The NOFO also emphasizes compliance with civil rights laws, racial equity, and affirmative marketing.

Applications are due by March 20, 2025, and must be submitted electronically via Grants.gov. Applicants must ensure active registration in SAM.gov and possess a Unique Entity Identifier (UEI). Awards are anticipated to be announced by May 20, 2025, with project periods lasting up to four years. Successful applicants will be required to submit detailed action plans for HUD approval before commencing program activities. Performance and financial reporting will be required throughout the grant period, with semi-annual updates due on March 31 and September 30 of each year.