September 1, 2026 — On August 18, HUD published PIH Notice 2026-21, “Public Housing Operating Subsidy Grant Eligibility Calculations and Processing for Calendar Year 2027.”

While the notice contains many of the usual provisions, it also includes several new provisions. These additions include the following changes:

• The notice says HUD has the right to “terminate, reduce, or limit the availability of a grant” for Operating Fund performance or substantial noncompliance. HUD considers factors outside of agency control to be a potential reason to take these actions.
• Operating subsidy recipients and their contractors are responsible for complying with all executive orders. It specifically names both future and existing executive orders.
• HUD claims the right to terminate all or part of an award for a series of reasons, including: grants “no longer effectuating program goals or agency priorities.” These actions could include a complete termination if a partial termination voids the initial purpose of funding.
• HUD has proposed a grant system that will apply to all grant recipients, named the HUD Unified Grant System (HUGS). This notice states that noncompliance with the reporting requirements for this future grant system will lead HUD to pursue remedies. This new system is not finalized, and comments on the system are due September 8, 2026.
• Finally, HUD discusses the relationship between this notice and potential lawsuits. All provisions not specifically struck down by a judge will be considered by HUD to remain in place.

The concerning certification language added for 2026 grants in Notice 2025-22 remains. The litigation from that notice, recent policy developments, and ongoing litigation will impact this year’s notice. NAHRO is aware and working to ensure agencies can continue serving their communities through this key source of affordable housing. More detail and analysis of this notice will be published in the September 15 edition of The NAHRO Monitor.

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