US Code

Public Law 119-103 (09/02/2026)

42 U.S.C. § 19505

Innovation fund

Section text and notes

(a)

Definitions

In this section:
(1)

Attainable housing

The term “attainable housing” means housing that serves households earning not more than 120 percent of the area median income, if the majority of the housing units are affordable to households earning not more than 60 percent of the area median income.

(2)

Eligible entity

The term “eligible entity” means—
(A)
42 U.S.C. 5302 a metropolitan city or urban county, as those terms are defined in section 102 of the Housing and Community Development Act of 1974 (), that has demonstrated an objective improvement in housing supply growth, as determined by the Secretary, whose methodology for determining such growth is published in the Federal Register to allow for public comment not less than 90 days before the date on which the notice of funding opportunity is made available; or
(B)
42 U.S.C. 5302 a unit of general local government or an Indian tribe, as those terms are defined in section 102 of the Housing and Community Development Act of 1974 (), that has demonstrated an objective improvement in housing supply growth, as determined by the Secretary, whose methodology for determining such improvement is published in the Federal Register to allow for public comment not less than 90 days before the date on which the notice of funding opportunity is made available.
(3)

Secretary

The term “Secretary” means the Secretary of Housing and Urban Development.

(b)

Establishment of a grant program

(1)

Establishment

Not later than 1 year after , the Secretary shall establish a program to award grants on a competitive basis to eligible entities that have increased their local housing supply.

(2)

List of eligible entities

The Secretary shall make a list of eligible entities publicly available on the website of the Department of Housing and Urban Development.

(3)

Eligible purposes

An eligible entity receiving a grant under this section may use funds to—
(A)
42 U.S.C. 5305 carry out any of the activities described in section 105 of the Housing and Community Development Act of 1974 ();
(B)
section 6702 of title 49 carry out any of the activities permitted under the Local and Regional Project Assistance Program established under ; and
(C)
carry out initiatives of the eligible entity that facilitate the expansion of the supply of attainable housing and that supplement initiatives the eligible entity has carried out, or is in the process of carrying out, as specified in the application submitted under paragraph (4).
(4)

Application

(A)

In general

An eligible entity seeking a grant under this section shall submit to the Secretary an application that provides—
(i)
a description of each purpose for which the eligible entity will use the grant, and an attestation that the grant will be used only for 1 or more eligible purposes described in paragraph (3);
(ii)
data on characteristics of increased housing supply during the 3-year period ending on the date on which the application is submitted, which may include whether such housing—
(I)
serves households at a range of income levels; and
(II)
has improved the quality and affordability of housing in the jurisdiction of the eligible entity;
(iii)
a description of how each eligible purpose described in clause (i) may address a community need or advance an objective, or an aspect of an objective, included in the comprehensive housing affordability strategy and community development plan of the eligible entity under part 91 of title 24, Code of Federal Regulations, or any successor regulation (commonly referred to as a “consolidated plan”); and
(iv)
a description of how the eligible entity has carried out, or is in the process of carrying out, initiatives that facilitate the expansion of the supply of housing.
(B)

Initiatives

Initiatives that meet the criteria described in paragraph (3)(C) include, but shall not be limited to—
(i)
increasing by-right uses, including duplex, triplex, quadplex, and multifamily buildings, in areas of opportunity;
(ii)
revising or eliminating off-street parking requirements to reduce the cost of housing production;
(iii)
revising minimum lot size requirements, floor area ratio requirements, set-back requirements, building heights, and bans or limits on construction that allow for denser and more affordable development;
(iv)
instituting incentives to promote dense development for communities where increased density is needed;
(v)
passing zoning overlays or other ordinances that enable the development of mixed-income housing;
(vi)
streamlining regulatory requirements and shortening processes, increasing code enforcement and permitting capacity, reforming zoning codes, or other initiatives that reduce barriers to increasing housing supply and affordability;
(vii)
eliminating restrictions against accessory dwelling units and expanding their by-right use;
(viii)
using local tax incentives or public financing to promote development of attainable housing;
(ix)
streamlining environmental regulations;
(x)
eliminating unnecessary manufactured-housing or cooperative housing regulations and restrictions;
(xi)
minimizing the impact of overburdensome energy and water efficiency standards on housing costs; and
(xii)
other activities that reduce the cost of construction, as determined by the Secretary.
(5)

Grants

(A)

In general

The Secretary shall make not fewer than 25 grants on an annual basis (unless amounts appropriated to provide grant amounts consistent with subsection (b) are insufficient, in which case fewer grants may be awarded), with strong consideration of different geographical areas and a relatively even spread of rural, suburban, and urban communities.

(B)

Limitations on awards

No grant awarded under this paragraph may be—
(i)
more than $10,000,000; or
(ii)
less than $250,000.
(C)

Priority

When awarding grants under this paragraph, the Secretary shall give priority to an eligible entity that has—
(i)
demonstrated the use of innovative policies, interventions, or programs for increasing housing supply; and
(ii)
demonstrated a marked improvement in housing supply growth, as needed.
(D)

Grant administration and terms

42 U.S.C. 5301Projects assisted under this section for activities described in sector 23 of the North American Industry Classification System shall be treated as projects assisted under the Community Development Block Grant program under title I of the Housing and Community Development Act of 1974 ( et seq.).

(c)

Rules of construction

Nothing in this section shall be construed—
(1)
to authorize the Secretary to mandate, supersede, or preempt any local zoning or land use policy; or
(2)
section 12705(c)(1) of this title to affect the requirements of .
(d)

Sunset

The program established under this section shall terminate on the date that is 7 years after .

(e)

Authorization of appropriations

(1)

In general

There is authorized to be appropriated to carry out this section $200,000,000 for each of fiscal years 2027 through 2031.

(2)

Adjustment

The amount authorized to be appropriated under paragraph (1) shall be adjusted for inflation based on the Consumer Price Index for all Urban Customers published by the Bureau of Labor Statistics of the Department of Labor.

Pub. L. 119–101, title II, § 208140 Stat. 875 (, , .)

Editorial Notes

References in Text

Pub. L. 93–38388 Stat. 633 section 5301 of this titleThe Housing and Community Development Act of 1974, referred to in subsec. (b)(5)(D), is , , . Title I of the Act is classified principally to chapter 69 (§ 5301 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

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