The Benefit of HUD’s Self-Help Homeownership Opportunity Program (SHOP)

The Self-Help Homeownership Opportunity Program (SHOP) is a federal grant program overseen by the Department of Housing and Urban Development (HUD). SHOP is a competitive grant program, meaning not all applicants receive funding. Eligible applicants are nonprofit organizations that provide, or plan to provide, affordable housing for low-income families. The grants awarded to these organizations allow them to undertake two primary tasks: first, to acquire land on which to build homes for low-income families; and, second, to do what is necessary to make those homes function as homes (i.e., install necessary utilities and ensure the other essential infrastructure is in place). Organizations that receive the SHOP grants may use them for those purposes.

Unfortunately, SHOP’s purchasing power and overall effectiveness has declined in recent years due to rising market prices. The median price of a unit that SHOP worked with rose to almost $200,000 in 2019 from 2011, when it was about $120,000. However, the spending limit per unit for SHOP in 2019 was the same as it had been in 2011, thereby offering minimal assistance. Recently, in October 2024, HUD announced the availability of $12 million to expand access to affordable housing and homeownership opportunities for Americans in rural and urban communities across the country. We do not know enough yet whether the next Administration will further complicate the housing market. Trump has said during campaigning that he wants to lower mortgage rates and loosen building regulations to boost supply.

I am not certain that $12 million in the scale of the housing crisis will go that far this year, but it is a start. Some of the requirements for the funding are that only national and regional non-profit organizations that have experience in offering self-help homeownership programs can apply for these grant funds. To qualify, applicants must use SHOP grant funds in at least two different states and they are offering higher preference for initiatives that address environmental justice and climate change, Minority Serving Institutions, Promise Zones, the Rural Partners Network Community Network, and the Rural Partners Network, according to the Fiscal Year 2024 SHOP Notice of Funding Opportunity.

For additional information on the Fiscal Year 2024 SHOP Notice of Funding Opportunity, including eligibility requirements, and to apply, click here.