Item 104/2026
Final
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Ursula Luna-Reynosa
Dept:
City Manager Dept: Economic Development and
Housing
Date: 4/14/2026
Subject: Approval of the Fiscal Year 2026-27 Annual Action Plan for the use of U.S.
Department of Housing and Urban Development funding. (Action Item)
OBJECTIVE
Conduct a public hearing to approve the Action Plan for the use of U.S. Department of Housing and Urban Development (HUD) funds and authorize its submittal to HUD.
BACKGROUND
The U.S. Department of Housing and Urban Development (HUD) requires a public hearing be conducted prior to the approval of the Fiscal Year (FY) 2026-27 Annual Action Plan to receive and utilize HUD grants. The City must submit an Annual Action Plan to HUD forty -five (45) days prior to the start of the fiscal year, or by May 15, 2026. Each year’s Action Plan must address the Priority Objectives adopted by the City Council on April 22, 2025 for the 5 -Year Consolidated Plan for the use of HUD Funds. The draft Action Plan is available on the City’s webpage for public review until April 14, 2026 (ggcity.org/neighborhood - improvement/reports).
HUD has n ot announced the City’s FY 2026 -27 grant allocations yet and the budgets and projections in the draft Action Plan are subject to change once the allocations are announced.
City Staff will use the budget breakdown that is provided in Appendix D of the draft Action Plan to adjust the funding levels for each program.
The Annual Action Plan outlines how federal funds from HUD will be used, including the Community Development Block Grant (CDBG), HOME Investment Partnerships Program (HOME), and Emergency Solution s Grant (ESG). CDBG funds support a wide range of community development activities, such as public services, infrastructure improvements, and economic development initiatives. HOME funds are dedicated to expanding and preserving affordable housing, including rental assistance programs. ESG funds address homelessness through services such as street outreach, emergency shelter, rapid rehousing, and homelessness prevention. Together, these programs collectively support the City’s efforts to address local housing and community development needs.
Item 104/2026
DISCUSSION
Approximately $2.53 million in HUD funds will be available during FY 2026-27, which includes approximately $520,000 of carryover funds, as outlined below:
HUD Funds FY 2026-27 Allocation Prior Year Carryover Total Funding CDBG $1,816,113 $450,000 $2,266,113
HOME $554,847 $0 $554,847
ESG $160,024 $70,000 $230,024
Total $2,530,984 $520,000 $3,050,984
Program and funding recommendations for FY 2026-27 are based on the Priority Objectives and input received during the public comment period on community and housing development needs conducted during the preparation of the 2025-2030 Consolidated Plan.
During FY 2026 -27, HUD funds will address a wide range of Garden Grove housing and community development needs, which include the following:
Public Services: Funding in the CDBG public service category is strictly limited by HUD regulatory formula to 15% of the total allocation, or $272,417 for FY 2026-27. Special Resource Team – Fund at $57,128 to assist 200 homeless individuals with essential services and referrals to emergency shelter. Senior Center Services – Fund at $145,289 to assist 500 seniors. Meals on Wheels Program – Fund at $20,000 to assist 140 individuals. Work Force Readiness (WARP) Program – Fund at $50,000 to assist 18 individuals.
Public Facilities and Infrastructure: Approximately $700,000 in CDBG funds is recommended for the Rockinghorse Road Infrastructure Project and is projected to assist approximately 4,415 individuals.
Owner Occupied Housing Rehabilitation: Approximately $160,000 in CDBG funds will be allocated to Habitat for Humanity of Orange County and Azure Community Development to complete 20 owner-occupied rehabilitation projects for single-family homeowners in Garden Grove.
Economic Development: Approximately $221,590 in CDBG funds is recommended for economic development activities. The recommended funding for t he Boost Program is $130,000, and Upwards is anticipated to assist 17 childcare agencies in Garden Grove build their capacity and expand operations.
The recommended funding for the MicroBiz Program is $91,590, with $250,000 from prior year funds and an ad ditional $200,000 in revolving loan funds. The MicroBiz Program is anticipated to assist 10 businesses in Garden Grove.
Item 104/2026
Affordable Housing: The City recommends allocating $250,000 in HOME funds to continue tenant-based rental assistance for the Homeless Emergency Assistance and Rental Transition (HEART) Program administered by Interval House.
Emergency Solutions Grant: City Staff conducted an Emergency Solutions Grant Request for Proposals in January 2025 to solicited proposals from qualified homeless service providers for homeless services this fiscal year. Below are the proposed funding levels and projections for each eligible activity:
Street Outreach - Fund Volunteers of America of Los Angeles (VOALA) at $45,000 to assist 40 homeless individuals with essential services. Emergency Shelter – Fund Interval House $45,000 to assist 40 homeless individuals with shelter and essential services.
Rapid Rehousing - Fund Interval House $53,750 to assist 2 homeless households with rental assistance and essential services. Homeless Prevention - Fund Interval House $56,525 to assist 4 households who are at-risk of homelessness with rental assistance and essential services. Homeless Management Information System - Fund 211 Orange County $4,800 to manage the County’ s Coordinated Entry System and Homeless Management Information System.
Administration: Approximately $430,709 in CDBG, HOME, and ESG funds is recommended for staff and material costs for program management, project development and monitoring, public communication, HUD reporting, and financial administration.
CITIZEN PARTICIPATION
All HUD citizen participation requirements have been met. Public notices regarding the draft Action Plan, including an invitation to share comments at this public hearing, were published on February 25, 2026 in local English, Spanish, and Vietnamese language newspapers.
FINANCIAL IMPACT
The proposed Action Plan will allow the City to access $2.53 million in new entitlement grants from HUD and an estimated $520,000 in unexpended prior year funds. The allocation of HUD funds effectively leverages competitive grants and the City’s General Funds. Funds will be included as part of the budget for FY 2026-27.
RECOMMENDATION
It is recommended that the City Council:
Conduct a Public Hearing to accept comments;
Direct staff to submit the F iscal Year 2026-27 Action Plan to the U.S.
Department of Housing and Urban Development (HUD) for approval; Authorize the City Manager , or designee, to execute agreements, and make modifications as appropriate thereto, on behalf of the City; and Item 104/2026
Authorize the Finance Director , or designee, to make minor changes to the budget to reflect the final amounts approved by HUD.
By: Dana Yang, Program Specialist
ATTACHMENT(S)
1. Fiscal Year 2026-27 Action Plan