Transform Distressed Neighborhoods: Choice Neighborhoods Implementation Grants

If your community has severely distressed public or assisted housing and you’re ready to replace it with mixed-income housing as part of comprehensive neighborhood transformation, HUD’s Choice Neighborhoods Implementation Grant can provide up to $50 million to make it happen. This isn’t just about tearing down old buildings and putting up new ones—it’s about fundamentally changing a neighborhood’s trajectory through housing, people, and neighborhood improvements working together.

Choice Neighborhoods is HUD’s flagship program for transforming concentrated poverty in public housing communities. It recognizes that you can’t solve housing problems in isolation. Residents need quality housing, yes, but they also need good schools, safe streets, job opportunities, retail services, parks, and all the things that make a neighborhood function. Choice Neighborhoods funds the full transformation, not just the bricks and mortar.

This is a competitive grant program, and competition is fierce. Awards typically range from $30-50 million per project, with HUD funding a handful of communities each year. Getting a Choice Neighborhoods grant requires years of planning, strong partnerships, significant matching funds, and an ironclad commitment from local leadership. But for communities that win, the transformation can be extraordinary.

What Choice Neighborhoods Funds

Choice Neighborhoods Implementation Grants fund three interconnected categories of activities, all working together toward neighborhood transformation.

Housing: Replacing Distressed Public or Assisted Housing

The core housing component replaces severely distressed public or HUD-assisted housing with mixed-income housing that’s indistinguishable from market-rate developments. This means demolishing old deteriorated public housing and building new mixed-income communities where public housing residents live alongside working families and market-rate renters or homeowners.

The goal isn’t to displace public housing residents—it’s to provide them with better housing in a better neighborhood. One-for-one replacement isn’t always required, but you must ensure all residents who want to return have the option to do so, and many will receive Housing Choice Vouchers for mobility.

People: Supporting Resident Services and Economic Opportunity

The people component ensures that public housing residents—both those who relocate and those who return—have access to services and opportunities to improve their lives. This includes case management, job training and placement, education programs, health services, youth programs, and supportive services for elderly or disabled residents.

This component recognizes that moving people from bad housing to good housing isn’t enough if they still face barriers to economic mobility. Choice Neighborhoods invests in helping residents succeed long-term.

Neighborhood: Revitalizing the Surrounding Community

The neighborhood component funds improvements beyond the housing site itself—things like new retail, upgraded parks and public spaces, improved streets and infrastructure, new community facilities, and initiatives to improve safety and walkability.

This reflects the reality that even beautiful new housing won’t thrive if it’s surrounded by abandonment, crime, and disinvestment. Choice Neighborhoods funds coordinated revitalization across the broader target area.

At a Glance: Program Essentials

Who Can Apply and What’s Required

Choice Neighborhoods Implementation Grants aren’t for everyone. The eligibility requirements and prerequisites are substantial.

Eligible Applicants

Only three types of entities can apply:

• Public Housing Authorities (PHAs) that own or manage the distressed housing
• Local governments partnering with a PHA
• Tribal housing entities (Tribally Designated Housing Entities or TDHEs)

In practice, most applications involve partnerships between a PHA and local government, often with the PHA as lead applicant. The partnership is critical because neighborhood transformation requires coordination across housing, planning, economic development, education, public safety, and other functions that span multiple agencies.

The Transformation Plan Requirement

You cannot apply for an Implementation Grant without first completing a Choice Neighborhoods Transformation Plan. This is a detailed, community-endorsed plan that serves as the blueprint for your proposed transformation.

Most applicants develop their Transformation Plan with funding from a separate HUD Choice Neighborhoods Planning Grant (up to $4 million over 2-3 years). These planning grants fund extensive community engagement, market studies, physical plans, relocation planning, partnership development, and financial feasibility analysis.

If you haven’t done a HUD-funded planning process, you can still apply for implementation if you have a locally-funded plan that meets HUD’s requirements, but this is less common.

Leverage and Match Requirements

Choice Neighborhoods requires substantial non-HUD funding committed to the project. While there’s no fixed percentage match requirement, competitive applications typically show at least a 1:1 ratio of non-HUD to HUD dollars, and often higher.

Sources of leverage include:

• Low Income Housing Tax Credits (LIHTC—almost always essential)
• New Markets Tax Credits
• State and local housing funds
• Private developer equity and financing
• Community Development Block Grants
• Other federal programs (EPA, DOT, etc.)
• Philanthropic contributions

Demonstrating that you’ve already secured firm commitments for this leverage makes your application much more competitive.

Site and Housing Requirements

The target housing must be “severely distressed” based on HUD criteria—think buildings with major systems failures, high vacancy, safety hazards, and obsolete design. Not all old public housing qualifies; it must meet specific distress thresholds.

The housing redevelopment must demonstrate:

• Mixed-income approach (public housing, affordable, market-rate)
• High-quality design and construction
• Integration into the surrounding neighborhood
• Sustainable development (green building, walkability, transit access)
• Financial feasibility with planned leverage

How the Application Process Works

Winning a Choice Neighborhoods Implementation Grant typically takes at least three to five years from initial planning to award. Here’s how the process usually unfolds.

Phase 1: Planning (2-3 Years Before Implementation Application)

Most communities start by applying for a Choice Neighborhoods Planning Grant. HUD typically releases this NOFO in the fall, with awards announced the following spring.

During the 2-3 year planning period, you:

• Conduct extensive community engagement with residents and stakeholders
• Develop preliminary physical plans and design concepts
• Complete market studies and needs assessments
• Build partnerships across agencies and sectors
• Identify leverage sources and begin fundraising
• Plan for resident relocation and services
• Refine the Transformation Plan through iterative community input
• Submit the final Transformation Plan to HUD

Phase 2: Implementation Application (Year 3-4)

Once your Transformation Plan is complete (or well underway if using local funds), you apply for the Implementation Grant. HUD releases the Implementation NOFO annually, typically in late spring.

The Implementation application is extensive—often 100+ pages—and requires:

• Detailed narrative explaining your proposed transformation across housing, people, and neighborhood components
• Demonstration of consistency with your Transformation Plan
• Evidence of strong community and partner support
• Project budget and timeline
• Firm leverage commitments and financing plan
• Relocation plan ensuring rights and choices for residents
• Evaluation and performance measurement plan

Applications are scored competitively based on criteria including need, soundness of approach, capacity, leverage, and likelihood of success.

Phase 3: Review and Award (Months 6-12)

HUD staff and expert reviewers evaluate applications. This process takes several months. If selected, you’ll receive notice typically in late fall or early winter, though timing varies.

Award recipients then negotiate a grant agreement with HUD, which can take additional months. Actual grant funds usually start flowing in the fiscal year after notification.

Phase 4: Implementation (5-7 Years)

Once under contract, you have 5-7 years to fully implement the transformation. This includes:

• Resident relocation before demolition
• Demolition of distressed housing
• New construction of mixed-income housing
• Implementation of people and neighborhood programs
• Ongoing resident engagement
• Quarterly reporting to HUD
• Compliance with HUD requirements

Most projects follow a phased approach, with some new housing constructed before old housing is demolished so residents can move directly into completed units.

Building a Competitive Application

Choice Neighborhoods is extraordinarily competitive. To maximize your chances, focus on these elements that distinguish successful applications.

Demonstrate True Partnership

Applications that win have diverse, committed partnerships across sectors—not just the PHA and city, but also schools, police, health systems, workforce agencies, nonprofit service providers, private developers, financial institutions, and residents themselves. Letters of support aren’t enough; show joint planning, shared resources, and formal agreements.

Center Resident Voice

Successful applications demonstrate genuine resident engagement throughout planning and a commitment to resident leadership going forward. Residents should be partners in design decisions, service planning, and implementation governance—not just recipients of services.

Show the Money

Firm leverage commitments matter enormously. A Low Income Housing Tax Credit allocation from your state is almost essential. Letters of interest from funders are nice; executed agreements and appropriated funds are far better. Demonstrating you’ve already raised significant non-HUD money proves viability and commitment.

Be Realistic About Feasibility

HUD reviews your financial pro formas, development timeline, and market assumptions. Overly optimistic projections raise red flags. Work with experienced developers and financial advisors to ensure your numbers are credible and your assumptions are defensible.

Tell a Compelling Story

While technical soundness matters, don’t forget the narrative. Explain why this neighborhood matters, what transformation will mean for residents and the broader community, and why your partners are committed to making it happen. Make reviewers understand and care about your community.

Connect to Broader Strategies

The strongest applications show how Choice Neighborhoods fits into broader city and regional strategies—comprehensive plans, economic development initiatives, education reform, transit investments, etc. This demonstrates Choice Neighborhoods isn’t happening in isolation but is part of coordinated community improvement.

Frequently Asked Questions

Can we apply without a Planning Grant first? Technically yes, if you have a Transformation Plan that meets HUD requirements developed with other funds. But in practice, most successful Implementation grantees received Planning Grants first. The planning process and HUD feedback during planning significantly strengthen Implementation applications.

How many projects get funded each year? It varies based on appropriations, but typically 6-10 Implementation Grants are awarded annually. Some years have been as few as 4 awards, others as many as 13. Competition is always intense.

Do we have to demolish all the public housing? Not necessarily. If some buildings can be viably rehabilitated to excellent condition and redesigned to avoid concentrated poverty, rehabilitation is allowed. But most Choice Neighborhoods projects involve substantial or complete demolition because the distressed housing is beyond cost-effective rehabilitation.

What happens to residents during redevelopment? Residents receive relocation assistance and counseling. Many receive Housing Choice Vouchers allowing them to move anywhere in the region. They have the right to return to the redeveloped community if they choose, though return rates vary widely by project. Throughout relocation, residents retain rights under the Uniform Relocation Act and public housing regulations.

Can we use Choice Neighborhoods for scattered site housing? Choice Neighborhoods focuses on transforming specific target neighborhoods, typically anchored by a concentration of distressed public housing. While related housing activities might occur at scattered sites, the program really functions best when there’s a defined neighborhood geography being transformed.

What if we don’t have Low Income Housing Tax Credits yet? You can apply showing you’ve applied for tax credits or demonstrating state commitment to allocate credits to your project. But applications are much stronger with an actual tax credit allocation already secured.

How long does planning typically take? Most Planning Grants run 24-36 months. Add time before that to prepare the Planning Grant application (6-12 months) and time after to prepare the Implementation application (6-12 months). Total timeline from starting planning to Implementation award is often 4-5 years.

Getting Started with Choice Neighborhoods

If you’re considering Choice Neighborhoods, start by honestly assessing whether you’reready for this level of commitment. This isn’t a quick fix or a typical grant program—it’s a multi-year, multi-partner transformation that will consume significant staff capacity and require sustained political will.

If you’re serious, begin by:

Building Relationships - Start talking to your counterparts. If you’re a PHA, meet with your mayor and city planning director. If you’re a city, engage your PHA. Discuss whether there’s shared commitment to neighborhood transformation.

Studying Best Practices - Visit existing Choice Neighborhoods sites. Attend HUD-sponsored conferences. Read evaluation reports from completed projects. Talk to peers who’ve been through the process about what worked and what challenges they faced.

Assessing Your Leverage Potential - Talk to your state housing finance agency about LIHTC availability, meet with local banks about New Markets Tax Credits, inventory local and state funding sources, and gauge philanthropic interest. Without leverage, you won’t succeed.

Engaging Residents Early - Even before formally applying for planning funds, start discussing possibilities with residents at the target site. Transformation can’t happen to people; it has to happen with them.

Applying for Planning Funding - Watch for HUD’s annual Choice Neighborhoods Planning NOFO (typically released in fall). A Planning Grant gives you time and resources to properly develop your approach before committing to implementation.

For more information about Choice Neighborhoods, visit HUD’s program page: https://www.hud.gov/cn or search for “Choice Neighborhoods” on HUD.gov.

Choice Neighborhoods represents HUD’s highest aspirations for transforming concentrated poverty through housing, people, and neighborhood investments working together. For communities with the vision, capacity, partnerships, and commitment to see it through, it can be truly transformational.