HUD Updates the Green and Resilient Retrofit Program for 2026: What Owners and Contractors Need to Know
HUD has issued a significant new update to the Green and Resilient Retrofit Program (GRRP), giving owners of previously awarded HUD-assisted multifamily properties a revised roadmap for moving their projects forward.
On January 26, 2026, HUD issued Notice H 2026-01, which supersedes the previous GRRP implementation notices and became effective March 1, 2026. The new notice modifies how existing GRRP awards are implemented, including changes to funding structures, eligible uses of funds and project administration.
For owners, developers and contractors, however, there is another important point that should not be overlooked:
A change in how GRRP funding is administered does not eliminate the labor compliance responsibilities attached to these projects.
A New Path Forward for GRRP Awards
HUD originally established GRRP using funding provided under the Inflation Reduction Act to support improvements at HUD-assisted multifamily properties. The program has funded rehabilitation and retrofit work involving energy efficiency, water efficiency, property improvements and measures designed to reduce risks from severe weather and natural disasters.
Under the new 2026 notice, HUD has made several substantial changes.
Among them, Comprehensive awardees can no longer move forward with their GRRP award as a grant. Those awards generally must be converted to Surplus Cash Loans. Similar conversion requirements apply to certain Elements and Leading Edge awards that had not progressed far enough through HUD’s transaction process before the new notice took effect. HUD also revised eligible uses of funds and modified several administrative requirements.
For development teams already balancing financing, construction scopes, closing requirements and project schedules, those changes create another layer of project administration to manage.
And then there are the federal compliance requirements.
Davis-Bacon Remains Part of the GRRP Picture
Notice H 2026-01 specifically addresses Davis-Bacon prevailing wage requirements.
For applicable GRRP construction, HUD’s notice establishes requirements concerning when Davis-Bacon prevailing wages apply to the project’s scope of work. Where Davis-Bacon applies, covered contracts and subcontracts must comply with applicable federal labor standards. The notice also contains specific provisions governing which wage determination is used and when an updated determination may become necessary if construction does not begin within the prescribed timeframe.
That makes early compliance planning especially important.
Prevailing wage compliance is not simply a matter of checking hourly pay rates after construction begins. Project teams may need to properly identify the applicable wage determination, confirm worker classifications, account for fringe benefits, monitor subcontractor payrolls and maintain the documentation necessary to demonstrate compliance throughout construction.
Problems discovered late in the process can be considerably harder to resolve than issues identified while work is underway.
Section 3 Requirements Continue as Well
HUD’s updated notice also expressly addresses Section 3.
GRRP funds constitute housing and community development assistance for purposes of Section 3. Owners meeting the applicable recipient thresholds are therefore subject to Section 3 requirements, including requirements intended to direct training, employment, contracting and other economic opportunities toward low- and very low-income persons and qualifying businesses to the greatest extent feasible.
Importantly, HUD requires owners to maintain documentation demonstrating Section 3 compliance and to report Section 3 information through the GRRP completion-certification process.
That documentation requirement matters.
Section 3 compliance is much easier to manage when worker hours, Section 3 worker eligibility, Targeted Section 3 worker information, contractor activity and outreach efforts are being tracked throughout the project—not assembled after construction has already been completed.
GRRP Compliance Should Be Managed Alongside Construction
Federal funding programs frequently involve overlapping requirements.
A GRRP project can involve the construction contract, HUD closing and draw requirements, Davis-Bacon prevailing wages, certified payroll, Section 3 documentation and other HUD requirements at the same time.
For developers and general contractors, the challenge is rarely a lack of willingness to comply. The challenge is creating a process that makes sure every contractor is providing the right information, problems are identified early, reports are complete and required documentation will still be available when HUD requests it.
That is why labor compliance should be established as part of the project’s administrative structure before construction activity accelerates.
Labor Compliance Services works with owners, developers and contractors on federally funded and HUD-assisted construction to manage prevailing wage, certified payroll, Section 3 and related compliance responsibilities. By creating a project-specific compliance process and monitoring it throughout construction, development teams can spend less time chasing documentation and more time keeping the project itself moving forward.
With HUD’s revised GRRP requirements now in effect, awardees preparing for the next phase of their projects should make labor compliance part of that preparation.
