The U.S. Department of Housing and Urban Development (HUD) announced significant changes to the Green Resilient Retrofit Program (GRRP) on January 26, 2026 in Notice-H-2026-01 (the “Notice”).  For those awardees who did not close prior to March 1, 2026, the changes found in the Notice will have immediate and substantial impact on their award. 

Establishment of GRRP

Established under Section 30002 of the Inflation Reduction Act of 2022, HUD instituted and designed GRRP with three goals in HUD assisted multifamily housing: (1) to reduce energy and water use; (2) to make these properties more resilient to extreme weather events and natural disasters; and (3) to reduce greenhouse gas emissions. Under the initial notice creating GRRP, funding opportunities were available under three parallel award programs. Elements Awards focused on projects that were further in the planning and financing process and would use the Elements Award to upgrade certain portions “with alternatives that provide higher energy efficiency,  greater climate resilience, or reduced emissions” (e.g., more energy efficient HVAC units) with the maximum award being up to $750,000. Leading Edge Awards in an amount up to $10,000,000 were meant for “extensive green and resilience investments as part of planned recapitalization” with the project achieving Leading Edge Qualifying Certifications (as defined in the Notice). Comprehensive Awards were meant to provide “funding for a comprehensive energy efficiency and resilience scope of work based on a suite of property assessments to identify each property’s greatest opportunities and needs for green and resilient upgrades.”   The maximum Comprehensive Award was $20,000,000 per property.

Change in Focus

The prior requirement for reduction and measuring of greenhouse gas emissions and using materials that reduce Embodied Carbon (i.e., greenhouse gas emissions from the mining, manufacturing, and transportation of building materials due to the energy-intensive processes for extracting raw materials and converting them into the end product and materials with high carbon storage capacity) have been removed to focus on “streamlining and cost-saving measures” with focus on energy and water efficiency, and the mitigation of casualty risk and disruption caused by natural disasters and severe storms.

Change in Form of Award

Under the prior notices, the  owner had the option to select the form of the GRRP award  - grant or surplus cash loan. All Comprehensive Awards must now be in the form of a surplus cash loan. Owners that originally elected to receive their Comprehensive Award in the form of a grant will be required to execute an amendment to the Award Letter to modify the form.  For Leading Edge Awards, if the  owner selected the award to be in the form of a grant, the  owner will need to execute an amendment to modify the award letter changing the form to a surplus cash loan, unless a Leading Edge Transaction Plan (described in Section 4.4 of the Notice) or Leading Edge Closing Package containing  draft documents to implement the Leading Edge Award and such other materials required by HUD were submitted, or the award already closed. The Notice requires that all Elements Awards recipients that have not reached closing or submitted its closing package prior to March 1, 2026 be in the form of a surplus cash loan.  For any award that the form of the award must be changed from a grant to a surplus cash loan, the owner will be required to amend the award letter or have its award subject to termination.

Prohibited Use of Funds

For awards that have not yet achieved closing, GRRP funds cannot “directly pay for installation of any Electric Vehicle Chargers or photovoltaic systems that convert sunlight to electricity.” 

Permitted Use of Funds

The prior notices had a prohibition on the use of GRRP funds for the “purchase, repair, or upgrade of any in-unit fossil fuel combustion applications or equipment.”  This prohibition was struck. 

Comprehensive Award Specific Changes

The owner will be responsible for procuring the required assessments, as HUD will no longer engage the Multifamily Assessment Contractors.  The assessments will no longer require a Renewable Energy Assessment or Climate Resilience Assessment. The Climate Resilience Assessment was replaced by a Risk Mitigation Assessment that “evaluat[es] the Property’s exposure to and risk from extreme weather or other natural disaster hazards.”   The  owner must additionally “prepare the Scope of Work for review and approval by HUD no later than” October 1, 2026, unless HUD approves of a good cause exemption.  HUD will review the Scope of Work and, once acceptable, “will issue an Approval Letter setting forth the approved Scope of Work and allocation of GRRP Funding.” 

GRRP Affordability Period for Comprehensive Award properties will be the later of “the term of the Surplus Cash Mortgage or five (5) years beyond any existing use restriction regarding affordability running in favor of HUD”.  The term of any Surplus Cash Loan shall be requested by the [o]wner and shall be either (i) of the date which is six-months after the maturity of any first lien mortgage financing or (ii) up to 30 years following the Closing.”

Conclusion

In light of the changes in the Notice, project owners will need to assess the impact on the scope of the project taking into consideration the financial structure and/or compliance requirements.   Early legal and financial review may help address potential risks and preserve the viability of affected awards.