HUD BABA requirements: what CDBG, HOME and public housing grantees must certify

HUD BABA requirements are where Build America, Buy America meets one of the largest, and messiest, funding streams the Act touches. Ask a CDBG grantee, a HOME-funded developer or a public housing authority whether the domestic-content rule applies to their project, and the honest answer is usually "it depends, and here is a form." HUD runs BABA across roughly two dozen separate programmes, Community Planning and Development grants, Public and Indian Housing funding, Native American housing block grants, each governed by its own implementation notice and waiver history. Housing also has a wrinkle nothing else in the BABA landscape has: a unit-count line that decides whether a project counts as infrastructure at all. This is the agency-specific view for anyone building, rehabbing or funding HUD housing who needs the actual mechanics, not another summary of the statute.

Which HUD programmes BABA actually reaches

The federal financial assistance test is the same one that pulls in every other agency covered on this site: if the money is federal financial assistance for infrastructure, BABA attaches to it. For HUD, that sweeps in a genuinely long list. Community Planning and Development programmes, CDBG, HOME, the Continuum of Care and Emergency Solutions Grants, the Housing Trust Fund, Section 108 loan guarantees, SHOP, PRO Housing and PRICE, are all in scope. So is Public and Indian Housing money: Choice Neighborhoods, the Public Housing Operating and Capital Fund, and Moving to Work. Native American housing block grants, IHBG, ICDBG and NHHBG, carry their own guidance layer on top. Lead Hazard Reduction, Healthy Homes, the Green and Resilient Retrofit Program, and the Section 202 and Section 811 supportive housing programmes round out the list. HUD's own BABA partner page is the current index of which notice governs which programme, and it is worth bookmarking rather than memorising, because HUD has revised it more than once since BABA took effect.

The two documents that actually run the show are Notice CPD-2025-01, issued 13 January 2025 for Community Planning and Development programmes, and Notice PIH-2025-06 for the public housing programme. Both superseded earlier 2022 and 2023 notices, and both include a Buy America Preference, or BAP, checklist that grantees are expected to complete and retain as their compliance record. If you are working from an older notice number in a subrecipient agreement or a state administrative plan, it is stale; confirm you are on the current CPD or PIH notice before you build a procurement process around it.

The five-unit line: housing's own trigger

Every other agency this site covers draws its BABA line around the funding itself: if federal money touches the infrastructure, the domestic-content test applies. HUD adds a second filter specific to housing. A project with one to four dwelling units is treated as private housing and sits outside BABA entirely, regardless of the federal funding behind it. A project with five or more units is classified as public infrastructure and has to run the full domestic-content test on its iron and steel, manufactured products and construction materials. That single number, five units, is the first thing to check on any HUD-funded residential project, before you get anywhere near a bill of materials, because it decides whether the rest of this guide applies to you at all.

Classifying a housing bill of materials

Once a project clears the five-unit line, the same three-category framework applies as everywhere else in BABA, but housing procurement leans on a different mix of items than a highway or a treatment plant does. Structural steel and rebar sit in iron and steel, judged all-or-nothing on where every manufacturing process happened. Concrete, drywall, insulation and similar bulk materials sit in construction materials, also all-or-nothing. Everything with moving parts, or an electronic component, HVAC systems, elevators, kitchen and bath appliances, is a manufactured product and lives or dies on the 55 percent US component-cost test.

That last row is not a hypothetical. HUD's own June 2026 request for information named HVAC systems, solar panels, elevators and electrical components as exactly the product categories it is trying to understand better, because those are where grantees report the domestic supply chain is thinnest and the compliance research heaviest. Run the actual bill of materials through the calculator rather than assuming an item's category from the table above; a packaged HVAC unit assembled in the US with an imported compressor can land either side of 55 percent depending on how the component costs fall.

The waivers HUD has actually granted

HUD has issued the same family of general waivers other agencies use, each published in the Federal Register with its own scope and expiry date. Most of the ones still live were set to run to 23 November 2027 when issued.

The small grants number is worth double-checking on any project you are scoping now: it moved because it tracks the government-wide Simplified Acquisition Threshold, which stepped up from $250,000 to $350,000 on 1 October 2025, and HUD's waiver rides on that figure rather than setting its own. A project you assessed as over the small grants line a year ago may sit under it today.

Why affordable housing developers say this is landing hardest

Every agency covered on this site hears complaints about cost and timeline, but HUD's is arguably the sharpest, because the same dollar the domestic-content rule adds to a project is a dollar the affordable-housing math was already stretched to cover. A survey of multifamily builders and property managers run by the National Association of Home Builders in the second quarter of 2025 found that among respondents using HOME or CDBG funding, 26 percent said BABA requirements would cause them to abandon some affordable housing projects outright, and 19 percent said it would cause them to raise rents to cover compliance costs. Those are not marginal numbers on a programme whose entire purpose is keeping rents down.

The mechanics behind that number are procedural as much as they are material: waiver requests routed through HUD and the Made in America Office can take six to ten months to clear, which collides badly with Low-Income Housing Tax Credit placed-in-service deadlines and other financing timelines that do not move for a federal waiver queue. Nonprofit developers, small contractors and rural builders, who tend to have the thinnest compliance staff, report carrying a disproportionate share of that burden. HUD's own June 2026 request for information was issued in direct response to exactly this feedback, asking the industry to help it understand current domestic-product availability and whether short-term, product-specific waivers are warranted; comments closed 20 July 2026, and the outcome will likely shape how strictly the manufactured-products test gets enforced on housing specifically.

Right now, a single federal rule is senselessly jacking up costs and adding massive delays to the urgent mission before us: building the tens of thousands of homes the people of New Hampshire urgently need. Our bipartisan Build Housing Affordably Act cuts needless red tape that is standing in our way and paves the way for affordable homes, built much sooner, at a lower cost. (Rep. Maggie Goodlander, co-sponsor)

Congress is already trying to change this

That quote is not campaign rhetoric detached from a live bill. Reps. Mike Flood and Maggie Goodlander introduced the Build Housing Affordably Act in June 2026, and it targets HUD's BABA implementation specifically rather than the Act as a whole. As drafted, it would require HUD to study BABA's effects on affordable housing development and the waiver process, report its findings to Congress, and pause BABA enforcement for covered affordable housing projects until 60 days after that report lands. It also sets a 90-day clock on waiver decisions for affordable housing projects, with the request deemed granted if HUD does not respond in time, a direct answer to the six-to-ten-month delays developers are currently reporting. The bill has not been enacted as of this writing, so none of that relief is in effect yet, but it is a strong signal of where HUD's housing-specific implementation is headed, and worth tracking if you are scoping a multi-year affordable housing pipeline against today's rules.

What to do on your own HUD-funded project

• Confirm your project clears the five-unit threshold before assuming BABA applies at all; one-to-four-unit projects are outside scope regardless of funding source.
• Identify the exact HUD programme funding the project and check it against the current CPD-2025-01 or PIH-2025-06 notice, not an older version referenced in a subrecipient agreement.
• Check the small grants figure against today's Simplified Acquisition Threshold ($350,000 as of 1 October 2025) and the 5 percent, $1 million de minimis allowance before assuming a project needs a full BOM determination.
• For CDBG specifically, confirm whether the funds were obligated before or after 15 November 2022, since that date decides whether the original transition waiver still applies.
• Classify manufactured products carefully, HVAC, elevators, appliances and solar equipment are exactly the categories HUD's 2026 review flagged as the hardest to source domestically, and run the actual bill of materials through a calculator rather than assuming a category from a general list.
• Start any waiver request early. Even with the current six-to-ten-month timeline unchanged, a request filed at design development clears well before a financing deadline; one filed at closing usually does not.

If a line item cannot clear its test, the standard waiver categories, nonavailability, public interest and unreasonable cost, remain open to HUD grantees the same way they do everywhere else in BABA, and a signed certification letter from the manufacturer is still the record you need on file regardless of which route a component takes. Waiver requests go through HUD's dedicated BABA Waiver Portal rather than by email, and the general practice recommended by housing-development counsel is to retain BAP documentation, including which waiver or exemption applied to each purchase, for at least three years after project completion.