By Renee Williams, NLIHC Senior Advisor for Public Policy
In a brief memo to public housing agencies (PHAs), HUD recently announced that it is “winding down” its Restore-Rebuild Initiative. Previously heralded by HUD a way to help “expand our nation’s supply of affordable housing,” HUD is now ending the initiative in furtherance of its broader stated goal of reducing the public housing footprint.
The memo outlines several changes, effective immediately, discussed below. HUD distributed the memo on May 15, 2026, though the memo itself is dated May 12, 2026.
Brief Background
As HUD’s website explains, many PHAs have authorization to have more public housing units than they currently have, up to a maximum number of units (the “Faircloth Limit”). Restore-Rebuild streamlines internal HUD processes for PHAs that seek to utilize this authorization to increase their number of deeply affordable units. As of 2024, over 250,000 units were available for potential development under the existing Faircloth Limit.
The initiative “restores to active use rental assistance subsidies that have been lost from the affordable housing portfolio and rebuilds homes that were demolished or sold over the past 20 years.” More specifically, the Restore-Rebuild Initiative provides PHAs with Rental Assistance Demonstration (RAD) approvals early in the process, and such approvals offer predictability for lenders. (See Advocates’ Guide 2026 at 4-16 and/or HUD’s Restore-Rebuild 2024 guide at 3-4).
For additional background on Restore-Rebuild (formerly known as “Faircloth to RAD”), see the Advocates’ Guide 2026 article “Rental Assistance Demonstration.”
HUD’s May 2026 Memo
The May 2026 memo begins by discussing the president’s FY27 budget proposal, which seeks to reset the Faircloth Limit to the number of public housing units PHAs will have as of October 1, 2027. Currently, the Faircloth Limit cutoff date is October 1, 1999. The memo explains that HUD seeks to reduce the “existing public housing footprint” and reposition “public housing units to the Section 8 platform.”
The memo makes several key points:
- HUD is no longer accepting new PHA requests for Notices of Anticipated RAD Rents (NARR).
- HUD will process NARRs that had been already requested “as of the date of this memorandum.”
- The NARR will be void 90 days “after the date of this memorandum” unless the PHA has either:
(1) received HUD approval “for mixed-finance development or public housing acquisition”;
(2) submitted “a substantially complete mixed-finance development proposal or public housing acquisition proposal to HUD for the proposed project”; OR
(3) “demonstrated through documentation from a state allocating agency that an application for Low-Income Housing Tax Credits for the proposed project has been submitted and is under review or has been approved.” Only transactions that meet one of these thresholds will be permitted to proceed under existing HUD Restore-Rebuild guidance.
HUD closes the memo by stating that this guidance does not make other changes to RAD or policies regarding public housing mixed finance.
Read HUD’s memo here.
Read the National Association of Housing and Redevelopment Officials’ (NAHRO) summary of the memo here.
Read the Advocates’ Guide 2026 article on RAD here.