Broad Implications If Adopted
On May 29, the Office of Management and Budget (OMB) and 41 other federal agencies published a proposed rule modifying numerous parts of the rules at 2 CFR: Federal Financial Assistance. The proposal includes significant changes to 2 CFR Part 200, “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.”
OMB’s goal is to establish a single, uniform federal requirement covering federal financial awards. The details, however, raise many concerns for housing authorities and administrators of HUD financial assistance, and for recipients of federal funding authorized by Congress, including transportation, human services, higher education, and research entities.
OMB established a 45-day comment period, and it hopes to issue a final rule by October 1, 2026, that would affect Federal Fiscal Year 2027 funding. PHADA is working with other industry groups and partners to analyze the rule in detail and plan appropriate actions.
Major changes in the proposed rule include:
- Changing Part 200 from Uniform Guidance to Uniform Grants Regulation.
- Incorporating Executive Orders—including those related to Diversity, Equity, and Inclusion, Gender Identity, and Disparate Impacts—into regulations.
- Prohibiting voter registration activities using federal funds.
- Eliminating fixed amount awards unless authorized by statute.
- Requiring a political appointee within the awarding department to approve every award.
- It remains unclear how revised definitions would classify the Annual Contributions Contracts (ACC), which govern the relationship between HAs and HUD.
- Retroactively creating an underlying basis for HUD’s recent notices concerning “Cash Management.”
PHADA will continue to review the proposed rule and will provide additional analysis, as well as templates for member comments, in the coming weeks. Members can send any concerns to: policy@PHADA.org to inform the ongoing development of PHADA’s formal comments. PHADA will also continue to work with industry partners, and possibly a broader group of stakeholders, in preparing responses to the proposed rule.