Surprising Changes for Tribal Housing FY2025 Explained
1. Accountability Is the New Watchword
In the world of federal grants, an applicant's past performance has always mattered, but the latest changes to the IHBG program elevate it from a checkbox item to a potential deal-breaker. In prior years, a Tribe’s track record on audits, reporting, and managing funds might have accounted for a handful of points in their application score. The FY 2025 announcement signals a dramatic pivot, massively increasing the weight of these accountability metrics.
The scoring changes are stark across the board. In FY 2024, an applicant could lose a maximum of two points each for issues with audit findings, late reporting, or overdue audit submissions. In FY 2025, the penalty for each of these same categories has quadrupled to a staggering eight points.
This isn't just a change in math; it’s a fundamental change in philosophy. The agency is making it clear that demonstrating the capacity to manage federal funds responsibly and efficiently is now paramount to receiving them.
Perhaps the most telling new rule is a direct strike against unspent emergency funds: the FY 2025 NOFO penalizes any applicant with undisbursed pandemic relief money (from CARES or ARP) with an automatic zero in a key capacity subfactor. The message is tough but clear: spend the emergency funds you have before asking for more.
2. Building New Isn't Always the "Best" Answer
Both the FY 2024 and FY 2025 funding announcements prioritize the construction of new housing. It’s a logical focus, given the goal of increasing the overall housing stock in Indian Country. An application proposing a new construction project is positioned to earn the maximum possible points in the "Project Type" category.
However, buried within the rules is a thoughtful and counter-intuitive exception. Both NOFOs state that a project focused exclusively on housing rehabilitation, meaning fixing up existing homes rather than building new ones, can also receive the maximum possible score. This top score is available only under one specific, data-driven condition: the applicant Tribe must be located in a community with extremely low income.
Specifically, the rule applies to Tribes "below the low-income 25th percentile threshold level according to the Tribal Area Per Capita Income (PCI) Resource List." This reveals a sophisticated strategy. HUD recognizes that for the most economically challenged communities, mandating new construction may be impractical. In these areas, preserving and improving the existing housing stock is often the most viable and impactful way to address substandard living conditions. It’s a nuanced policy that swaps a one-size-fits-all mandate for a data-informed approach tailored to community needs.
3. The System Is Trying to Level the Playing Field
Highly competitive federal grants can inadvertently create a cycle where the winners keep winning. Organizations with the experience, staff, and resources to write polished applications often have a significant advantage, leaving smaller or less-resourced Tribes struggling to compete.
The IHBG Competitive Program actively works to break this cycle. Both the FY 2024 and FY 2025 announcements include a scoring mechanism designed to give less-frequent applicants a better chance. The FY 2024 rules offer a stark example: applicants who won funding in the two most recent competitions (FY 2022 or FY 2023) automatically receive zero points in this category.
Conversely, the FY 2025 NOFO awards the maximum four points to an applicant who has never previously received an IHBG Competitive award. This is a deliberate policy choice to broaden the distribution of funds. It ensures that Tribes who were previously unsuccessful, or who are applying for the very first time, aren't perpetually disadvantaged and have a genuine opportunity to secure a grant.
4. A Surprising Move from a Federal Agency: Cutting Red Tape
They're actually trying to reduce paperwork. In a move that defies the conventional wisdom about government grants, HUD is actively working to dismantle its own red tape. "More government funding" is often synonymous with "more paperwork," yet that's exactly the opposite of what we see in the FY 2025 IHBG funding announcement.
The FY 2025 NOFO introduces a "New HUD-wide NOFO Template" that is explicitly described as "streamlined and simplified." This isn't just a cosmetic change in formatting. The document lists specific forms and certifications that are no longer required with the initial application, including:
The Certification of Compliance
The Environmental Review - Expression of Intent
While these elements are still part of the post-award process, removing them from the upfront application reduces complexity and lowers the barrier to entry. This move aligns with a broader federal policy goal cited in the FY 2024 NOFO, which references an Executive Order encouraging agencies to "reduce administrative burden on Tribes." While it's just one program, it represents a tangible step toward making complex funding more accessible for the communities that need it most.
Conclusion: A Smarter Approach to a Stubborn Problem
Taken together, these changes paint a picture of a federal agency implementing a cohesive new grantmaking philosophy. The dramatic emphasis on accountability isn't just about punishment; when paired with a deliberate effort to level the playing field for new applicants and cut red tape, it reveals a strategy to cultivate a larger, more competent, and more diverse pool of grantees. By rewarding data-driven project selection over a one-size-fits-all mandate, HUD is signaling that it wants to fund not just shovel-ready projects, but thought-ready partners.
As HUD refines its approach with these targeted changes, the fundamental question remains: Can even the smartest strategy close a housing gap that has been decades in the making?