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Presentation, discussion, and possible action on Program Year 2026 Emergency Solutions Grants Program Awards
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RECOMMENDED ACTION
recommendation
WHEREAS, the Department received an allocation of $10,262,662 in Emergency Solutions Grants Program (ESG) funds for Fiscal Year 2026 from the U.S. Department of Housing and Urban Development (HUD) of which $9,800,842 was made available in accordance with 10 TAC Chapter 7, Subchapter C, Section 7.33, Apportionment of ESG Funds;
WHEREAS, the Board authorized release of the Notice of Funding Availability (NOFA) for the ESG Program totaling $9,800,842 on May 7, 2026;
WHEREAS, HUD regulations require the Department to award ESG funds within 60 days of HUD’s execution of the grant agreement, anticipated to be received within the next 30 days;
WHEREAS, pursuant to 10 TAC §7.34, Continuing Awards, the Department evaluated 42 eligible Applications in accordance with established rules and criteria, and approved 35 Applicants to receive Continuing Award offers totaling $6,964,236;
WHEREAS, the Department received 82 Applications from eligible Applicants under a Competitive Application cycle in response to the NOFA, with requests totaling $9,183,738;
WHEREAS, the Applications received under the NOFA have been reviewed and ranked in accordance with the requirements of 10 TAC §7.38(b); and
WHEREAS, the Previous Participation Review and Approval Process (PPRAP) has reviewed the compliance history of all Applicants, and recommends approval with conditions for Harmony Community Development Corporation, Inc., and recommends approval with no conditions for all other Applicants;
NOW, therefore, it is hereby
RESOLVED, that the Executive Director, his designees, and each of them be and they hereby are authorized, empowered, and directed, for and on behalf of the Department, to take any and all such actions as they or any of them may deem necessary or advisable to effectuate awards totaling $9,800,842 for ESG funding recommended under the ESG NOFA as detailed in Attachment B.
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BACKGROUND
The ESG Program is a HUD-funded program designed to assist people experiencing homelessness or at-risk of homelessness to regain stability in permanent housing quickly after experiencing a housing crisis and/or homelessness. The program components under ESG include street outreach, emergency shelter, rapid re-housing, homelessness prevention, Homeless Management Information System (HMIS), and administration. Rapid re-housing and homelessness prevention may be used for housing relocation and stabilization services and short-term and medium-term rental assistance.
On May 7, 2026, the Board approved the release of a NOFA notifying prospective Applicants of availability of PY2026 ESG funds; the NOFA closed on June 25, 2026. The NOFA resulted in 35 offers for a Continuing Award and 29 Award offers under the Competitive Application cycle. The distribution of the regional allocation between the Continuing Awards and the Competitive Cycle is summarized in Attachment C.
Applicants were assigned a random number as a tiebreaker for use in case of a tied score, per 10 TAC §7.38(d). Applicants were ranked by score and then by tiebreaker number, with the high numbers ranking higher than lower numbers. Recommendation of a Continuing Award is not determined by a score; therefore, these Applications do not reflect a score or a tie breaker number in the attachment. The final scores were determined after a staff review. The review process allowed the opportunity for Applicants to provide clarification, correction, or non-material missing information when necessary and requested by staff. This information was requested to resolve inconsistencies in the original Application or to assist staff in evaluating the Application, per 10 TAC §7.37(b).
After completion of the scoring and ranking process, award recommendations were determined in accordance with the process outlined in 10 TAC §7.38 through two levels of funding. Level one of funding is for the highest ranked Applications within each CoC region, until the funding is exhausted or until there is an offer of a partial award. Level two pools unused funds from level one of funding and offers the pooled funds to the highest ranked Applications statewide.
The Department received three appeals related to the 2026 ESG NOFA. HTX H.O.P.E. Haven (HHH) was determined ineligible for a Continuing Award because it failed to submit required 2025 report information in SAGE (HUDs reporting system) by the Department’s established deadline, as required by 10 TAC §§7.5(h)(1) and 7.34(c)(10). HHH attributed the late submission to confusion regarding its two ESG grants and appealed the determination, citing substantial compliance with other grant requirements, including timely reporting, a high expenditure rate, and no monitoring findings. The Department reviewed the applicable rules, TDHCA correspondence, and SAGE records and determined that the outstanding report was submitted after the deadline. The Executive Director denied the appeal because sufficient grounds for reconsideration were not established.
HHH subsequently appealed the Executive Director’s decision to the Board on May 7, 2026, and requested that the Board reverse the eligibility determination or allow HHH to participate in the competitive process for the 2026 ESG NOFA. The Board upheld staff’s denial of the appeal, finding no basis to overturn the eligibility determination and no new information establishing HHH’s eligibility under the applicable rule. However, the Board approved a staff-recommended waiver allowing entities deemed ineligible for a 2026 Continuing Award under 10 TAC §7.34(c)(10) to apply under the 2026 ESG NOFA, notwithstanding 10 TAC §7.36(a)(13). As a result, HHH was eligible to participate in the Regional Competition.
Applications for both The Salvation Army of Tyler (SAT) and The Salvation Army of Amarillo (SAA) were terminated after staff determined that the required supporting documentation was not included at the time of submission, preventing evaluation of the NOFA’s threshold requirements. Both Applicants appealed on July 7, 2026, citing a limited upload error, noting that the required documentation had been prepared by the deadline, and subsequently submitted after the error was identified. Both acknowledged that their Applications were incomplete at the time of submission but requested reconsideration and reinstatement for threshold and competitive review. The appeals were denied by staff on July 10, 2026, based on the applicable rule and the lack of sufficient grounds to warrant reconsideration. No further appeal was made.
The total amounts available by CoC region, and the total requests received are listed in Attachment A. The requirements set forth in 24 Code of Federal Regulations (CFR) §576.100(b)(1) mandate that no more than 60% of the state’s ESG allocation be used for street outreach and emergency shelter. As a result, in some cases, higher scoring Applicants with emergency shelter or street outreach Applications were offered a partial award to ensure that the state would not exceed this cap. The Emergency Shelter and Street Outreach Cap per Region is summarized in Attachment A.
All Applications recommended for award under the NOFA and through direct award have undergone a previous participation review. On August 24, 2026, the Previous Participation Review Approval Process (PPRAP) recommended conditional approval for Harmony Community Development Corporation, Inc. (Harmony CDC). As a condition of award, Harmony CDC must submit a response to the Single Audit Management Letter for Fiscal Year End (FYE) December 31, 2025, no later than September 24, 2026. Depending on the results of the response letter, the Department may require additional information be provided. The award is contingent upon satisfaction of this condition, and failure to comply may result in reallocation of funds. PPRAP recommended approval with no conditions for all other Applicants. The results of the NOFA, including funding recommendations, are included for approval as Attachment B for the Regional competition and Attachment D for the Statewide Competition.