HUD Proposes Rules for Faith-Based Grantees - Faith-based Initiative

Faith-based Initiative: News Background Analysis Correspondence Gov Docs

Published: 01/07/2003

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HUD Proposes Rules for Faith-Based Grantees

On January 6 the Department of Housing and Urban Development proposed new regulations implementing the President’s December 12, 2002 Executive Order requiring “equal treatment” of faith-based organizations in the federal grant process. The proposal is similar to regulations proposed last month by the Department of Health and Human Services. Public comments are due March 7, 2003.

The new rule would prohibit HUD from excluding faith-based organizations from consideration for federal grants because of their religious character, mission or motivation. In addition, faith-based organizations would be allowed to retain religious requirements for board membership, display religious art and icons on the premises where government funded services are provided, and have religious references in their name. The order also would allow grantees under the Community Development Block Grant Program to discriminate on the basis of religion when hiring staff for government funded positions.

However, faith-based grantees would be required to separate government funded services from religious activity, requiring that religious activity is “offered separately, in time and location, from the program services funded by HUD”. However, this restriction only applies to direct HUD grants, so that faith-based organizations will be allowed to mix religious and government program activities where “indirect” HUD funds are used. “Indirect “ funds are defined as vouchers, certificates, coupons or similar funding mechanisms, where the beneficiary is presumed to have a choice of providers.

While the new rules would prohibit faith-based providers from discriminating against a program beneficiary or applicant on the basis of religious affiliation or belief, there is no requirement that a “secular alternative” be provided to people that object to the religious character of a provider. The rules also do not have a provision proposed by HHS that would allow faith-based grantees to extend invitations to worship to program beneficiaries, if reassurances are given that assistance will not be impacted by refusal to participate.

The proposal prohibits use of HUD funds to construct or acquire buildings that will be used for religious purposes, but does allow proportional allocation of costs where a building will be used for both religious and government programs. Programs included under the proposed regulations include: HOME Investment Partnerships, Community Development Block Grants, Hope for Homeownership of Single Family Homes, Housing Opportunities for People With AIDS, Emergency Shelter Grants, Shelter Plus Care, Supportive Housing and Youthbuild.

For more background on nonprofits and the faith-based initiative see Charitable Choice section of our website. http://www.ombwatch.org/article/archive/52/