The Build Housing with Care Act of 2025 directs the Secretary of Housing and Urban Development to run a competitive grant program that pays for the design, planning, construction, conversion, retrofitting, preservation, long-term leasing, or renovation of housing that includes an eligible child care provider on-site, on-premises, or nearby. Eligible applicants include CDFIs, public housing agencies, LIHTC and NMTC developers, tribes, non-profit housing developers, community development corporations, eligible child care providers and consortia.
Grants may be distributed to subgrantees and CDFIs may capitalize awards into finance products.
The bill prioritizes projects in child care deserts, low-income communities, and rural areas, caps awards at $10 million per eligible entity, and authorizes $100 million per year for fiscal years 2026–2031. It requires applications to certify provider eligibility for CCDBG or Head Start funding, a resident engagement plan, and that grant-funded activity will not result in eviction.
The statute also directs HUD to publish best practices, provide technical assistance, and report annually to Congress; the GAO must study child care availability and affordability for public housing residents.
At a Glance
What It Does
Establishes a HUD-administered competitive grant program to fund capital activities that create or preserve co-location facilities — housing paired with an eligible child care provider. Grants may be passed through to government entities, PHAs, non-profits, tribes, or capitalized by CDFIs into loans and other finance products; awards are limited to $10 million per entity.
Who It Affects
Public housing agencies, affordable housing developers (including projects using LIHTC or NMTC), CDFIs, eligible child care providers (including Head Start grantees and CCDBG-eligible providers), tribes and tribally designated housing entities, and state and local land-use authorities responsible for permitting.
Why It Matters
This bill centrally aligns federal housing capital with child care infrastructure — a shift from standalone investments toward integrated facilities. It creates a new, capital-focused federal lever to expand child care slots near low-income housing but leaves operating financing (staffing, subsidies) to existing programs and local actors.
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What This Bill Actually Does
At its core the bill creates a HUD-run, competitive grant program to finance building or preserving housing that includes access to child care for residents. HUD must consult with HHS (Administration for Children and Families), the Treasury (CDFI Fund), and USDA Rural Development when designing the program.
Eligible applicants cover a broad set of organizations: CDFIs, public housing agencies, Indian tribes and tribal housing entities, LIHTC and NMTC developers, nonprofit housing developers, community development corporations, eligible child care providers, and consortia among them.
Applications must include several certifications and materials: proof that the associated child care provider is eligible for CCDBG vouchers or Head Start (or a commitment to form such a partnership within a year for new providers), a plan to engage residents and a certification that grant activities won’t result in eviction. HUD will prioritize projects located in ‘‘child care deserts,’’ low-income communities or rural areas, projects enrolling or designated as Head Start/Early Head Start or enrolling at least 10 percent very-low-income children, and those that partner with CDFIs for financial or technical support.Grant funds are explicitly capital in scope: design, planning, construction, acquisition, preservation, conversion, retrofitting, renovation, and long-term leasing.
An awardee can distribute funds to subgrantees (PHAs, non-profits, tribes) and CDFIs may capitalize grants into loans and other finance products. The bill caps awards at $10 million per entity and allows up to 10 percent of an award for pre-development and up to 10 percent for technical assistance and capacity building tied to CDFIs.
HUD must publish best practices and provide technical assistance to support co-location operations.HUD must report annually to the specified congressional committees on program outputs (grants awarded, child care slots created or preserved, demographics, staff employed, etc.). Separately, the GAO must study child care availability and affordability for public housing residents and examine how various federal programs and tax credits have been used to support child care facilities.
Congress authorizes $100 million per fiscal year from 2026 through 2031 to implement the program.
The Five Things You Need to Know
The program limits awards to $10 million per eligible entity and authorizes $100 million per year for FY2026–FY2031.
Applications must certify that grant-funded activities will not result in eviction and include a resident engagement plan.
HUD must prioritize projects that serve ‘‘child care deserts,’’ low-income communities, or rural areas and those that involve Head Start/Early Head Start or enroll at least 10% very-low-income children.
Community Development Financial Institutions can capitalize grant awards to create finance products (loans) and eligible recipients may subgrant funds to PHAs, tribes, or nonprofit housing developers.
An eligible entity may use up to 10% of its award for pre-development (planning/design) and up to 10% for technical assistance and capacity building tied to CDFI partnerships.
Section-by-Section Breakdown
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Short title
Names the statute the 'Build Housing with Care Act of 2025.' This is administrative but matters for cross-referencing and appropriation language.
Statement of purpose
Frames the program objective: expand access to affordable housing and child care through co-location. The congressional intent guides HUD’s rulemaking and priorities but does not create enforceable benefits for individuals beyond the grant program.
Key definitions, including 'child care desert' and eligible entities
Defines terms that determine eligibility and targeting. Notably, a 'child care desert' is a census tract with either zero licensed providers or at least three times more children than licensed capacity — a metric HUD will use to prioritize awards. 'Eligible entity' is broad, including CDFIs, LIHTC and NMTC developers, PHAs, tribes, community development corporations, eligible child care providers, and consortia, which expands the applicant pool beyond typical HUD grantees.
Grant program structure, application requirements, priorities, and eligible uses
HUD must run a competitive grant program funding design, planning, construction, conversion, retrofitting, preservation, acquisition, renovation and long-term leasing of co-location facilities. Applications must certify provider eligibility for CCDBG vouchers or Head Start (or commit to forming a partnership within a year), contain business plans for providers (or commit to submit one within a year), show compliance with environmental and land-use laws (with narrow exceptions), and certify that grant activities will not evict residents. HUD gives priority to projects in child care deserts, low-income or rural areas, projects tied to Head Start or serving a minimum share of very-low-income children, and projects that demonstrate CDFI partnerships.
Funding mechanics, distribution, technical assistance, and reporting
Awards may be passed through to government entities, tribes, PHAs, nonprofits, and CDFIs; CDFIs may capitalize awards into loans or other finance products. The statute permits up to 10% of awards for pre-development and up to 10% for technical assistance and capacity building—specifically to support provider licensing and application capacity. HUD must provide technical assistance, publish best practices, and report annually to the named congressional committees on outputs (grants, child care slots created/preserved, demographics, staff counts, etc.). Awards are capped at $10 million per eligible entity.
GAO study on child care access for public housing residents
Directs the Comptroller General to study and report on child care availability and affordability for residents of public housing, including how federal programs and tax credits have been used to support child care facilities, the interaction of rental assistance and child care affordability, outreach/uptake of tax credits and benefits, zoning barriers, and recommendations to improve access. The GAO study dovetails with HUD reporting and is designed to surface operational and policy constraints beyond capital funding.
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Explore Housing in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Low-income families living in or near public and affordable housing — closer, on-site, or nearby child care reduces transportation burdens and can increase work and training opportunities for caregivers.
- Eligible child care providers, including Head Start and CCDBG-eligible providers — capital grants reduce the barrier of facility costs and can preserve or create licensed slots, especially in child care deserts.
- Affordable housing developers (LIHTC and NMTC projects) — co-location can increase project competitiveness for federal and private capital, diversify services offered to tenants, and improve project community impact.
- Community Development Financial Institutions — ability to capitalize grant funds expands lending and product offerings targeting co-location projects and builds origination pipelines.
- Tribal housing entities and tribally designated housing organizations — explicit inclusion as eligible entities allows culturally specific, place-based co-location projects in tribal communities.
Who Bears the Cost
- HUD — administrative and oversight responsibilities, program design, technical assistance delivery, and annual reporting will require staff time and agency resources beyond grant dollars.
- Eligible entities and applicants — preparing applications, meeting certification requirements (provider eligibility, environmental compliance, resident engagement), and developing sustainable operating plans for child care adds transaction and compliance costs.
- State and local governments and permitting authorities — may need to adapt zoning and licensing to enable on-site or nearby child care at housing projects; the bill flags these barriers but does not fund local regulatory change.
- Child care providers and operators — while capital costs may be covered, providers still must secure operating funding (staffing, licensing, enrollments, vouchers), which the statute does not directly finance.
- Developers using layered financing (LIHTC, NMTC) — administratively and legally complex layering of HUD grants with tax credits and CDFI capital may increase transactional complexity and require specialized counsel.
Key Issues
The Core Tension
The central dilemma is whether federal capital investments should prioritize building co-located facilities when the recurring operating funds, staffing, and licensing that make child care functional are controlled by separate programs and local actors: the bill can create space, but not necessarily sustainable services—raising the trade-off between rapidly expanding physical capacity and ensuring long-term, affordable child care access for the intended residents.
The bill funds capital work, not operating subsidies. Building or preserving space for child care does not guarantee a viable, licensed, staffed program; the statute leans on existing CCDBG and Head Start funding pathways but provides no operating guarantees.
That gap creates the risk of constructed facilities that remain underused or dependent on fragile local subsidy arrangements.
The statute attempts to guard residents against displacement by requiring a certification that grant activities will not result in eviction, but it leaves enforcement mechanics unspecified. HUD will need clear standards and monitoring to ensure capital upgrades aren't used to justify rent increases or changes in tenant selection.
Similarly, definitions such as 'nearby' and the census-tract based 'child care desert' metric may create edge cases where resident access is logically limited despite meeting statutory criteria.
Finally, the program's scale—$100 million per year with a $10 million per-entity cap—will be meaningful for many local projects but modest relative to national shortages in housing and child care capacity. The bill relies heavily on partnerships (CDFIs, tax-credit developers, Head Start) to leverage additional capital and operational supports, which concentrates benefits where such partnerships already exist and may leave smaller, disconnected providers with less access.
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