Grants Available for Felons: Education, Business, and Housing

Grants available for people with felony convictions fall into a smaller set than most searches suggest: the Federal Pell Grant for education, Department of Justice-funded reentry services delivered through local organizations, Department of Labor workforce training and hiring supports, and — as loans rather than grants — Small Business Administration financing that opened up significantly in 2024. A felony narrows some options. It closes fewer than people assume.

Pell Grants for Education

The Federal Pell Grant is the single most valuable direct grant a person with a felony record can receive. For the 2026–27 award year, the maximum award is $7,395 and the minimum is $740, and the money does not have to be repaid.¹ It can go toward tuition, fees, books, and required supplies at an eligible school.

Two recent changes matter. Drug convictions no longer affect your eligibility for federal student aid; that restriction was eliminated under the FAFSA Simplification Act starting with the 2021–22 award year.² Federal Student Aid states this without qualification.³ And as of July 1, 2023, people who are currently incarcerated in federal or state facilities can receive a Pell Grant if they enroll in an approved prison education program, reversing a ban that stood since 1994.⁴

To apply, complete the FAFSA. Incarcerated applicants can submit a paper FAFSA form designated for incarcerated students by mail; everyone else uses the online form.⁵ The FAFSA itself does not ask about criminal history. Pell is need-based: for 2026–27, a Student Aid Index above $14,790 disqualifies an applicant.¹

Second Chance Act Reentry Services

The Second Chance Act is the primary federal law funding programs that reduce recidivism. Through the Bureau of Justice Assistance, the Department of Justice funds community-based reentry, housing, substance abuse treatment, education, and employment services, with one recent round of awards totaling nearly $100 million.⁶⁷

Here is where expectations need adjusting. Second Chance Act grants go to state and local governments, tribal entities, and nonprofit organizations, not to individuals. You benefit by enrolling in the programs those organizations run. A local reentry nonprofit funded by BJA might offer job training, transitional housing, or mentoring at no cost. The practical step is to find reentry service providers in your area and ask what federally funded programs they operate.

Workforce Training and Hiring Supports

The Department of Labor’s Reentry Employment Opportunities program funds workforce training built for people with criminal records. The current initiative, RESTART, focuses on skilled trades, manufacturing, apprenticeships, information technology, and transportation, and serves youth 15–17, young adults 18–24, and adults 25 and older who have a criminal record or past incarceration.⁸ Services include skills assessments, pre-apprenticeships, on-the-job training, and registered apprenticeships.

These grants also go to states, tribes, and intermediary organizations rather than to individuals. Your entry point is the local workforce system. American Job Centers exist in every state and connect job seekers with training funded through the Workforce Innovation and Opportunity Act and related programs. You can walk into any American Job Center and ask about reentry services without applying for a federal grant yourself.

Federal Bonding Program

The Federal Bonding Program is one of the most underused resources for job seekers with felony records. Many employers hesitate to hire someone with a conviction because of liability fears. The program provides free fidelity bonds that protect the employer against theft, forgery, or embezzlement by the bonded employee. Standard coverage is $5,000 per new hire with no deductible, with higher coverage up to $25,000 available when justified. The bond takes effect on the first day of work and lasts six months, after which the employer can purchase continued coverage.⁹ It costs the employer nothing upfront. Your state workforce agency administers it.

Work Opportunity Tax Credit

The Work Opportunity Tax Credit gave employers a financial reason to hire people with felony convictions. An employer who hired a qualified ex-felon could claim a credit equal to 40% of up to $6,000 in first-year wages, a maximum of $2,400, if the hire happened within one year of conviction or release.¹⁰ The program’s authorization expired for individuals who began work after December 31, 2025.¹¹ Congress has renewed the credit multiple times before, so check whether it has been extended when you are applying for jobs.

SBA Financing for a Business

The Small Business Administration does not give grants to individuals. Its loan programs, though, are far more accessible to people with criminal records than they used to be. A final rule effective May 30, 2024, removed restrictions based on probation or parole status across the SBA’s major programs, including the 7(a), 504, Microloan, Disaster Loan, and Surety Bond Guarantee programs.¹²

Two categories still bar SBA-backed financing: being currently incarcerated, and being under indictment for a felony or a crime involving financial misconduct.¹² If you have completed your sentence and are not facing pending charges, you are eligible at the SBA level. One caveat: SBA loans go through participating lenders, and each lender still sets its own underwriting policies and may run background checks. The federal rule opens the door; the bank makes the final call.

The SBA Microloan Program is a good starting point for smaller ventures. Microloans go up to $50,000 and are distributed through nonprofit intermediary lenders that often provide business training alongside the financing.

Housing Assistance

Federal housing assistance is not a grant, but it is a common assumption, so it is worth being clear on where a felony record does and does not close the door. HUD programs like Housing Choice Vouchers and public housing are not automatically off-limits. Public Housing Agencies run background checks, and federal regulations set limits on how criminal records can be used in admission decisions.¹³

A few bars are absolute. If you are subject to a lifetime sex offender registration requirement, federal law requires denial of admission to federally assisted housing.¹³ Convictions for drug manufacturing or distribution can also be used as grounds for denial. Beyond those, HUD has stated that blanket bans on all applicants with criminal records are not legally defensible; housing providers must evaluate each case on its facts, considering the type of offense and how long ago it happened.

If a Public Housing Agency uses your criminal record to deny your application, it must notify you, give you a copy of the record, and let you dispute its accuracy and relevance before the decision is final.¹³ That right matters. Criminal record databases contain errors, and a wrong entry can cost you housing if you don’t challenge it.

How to Apply

There is no single portal where individuals browse and apply for reentry grants. Grants.gov lists funding opportunities for organizations and government entities, not personal financial assistance for individuals.¹⁴ The application path depends on what you need.

For education funding, complete the FAFSA. You will need a Social Security number, tax information (or confirmation that you didn’t file), and basic household details.⁵

For workforce training and reentry services, visit your local American Job Center. Staff can assess your skills, connect you with WIOA-funded training, refer you to reentry-specific programs, and help you access the Federal Bonding Program.⁸

For SBA loans, contact participating banks, credit unions, or nonprofit microloan intermediaries. Prepare a business plan, financial projections, and personal financial statements. Be straightforward about your criminal history; the SBA’s updated application asks about current incarceration status rather than a full accounting of past offenses.¹²

Across programs, gather government-issued ID, proof of release or completion of sentence, income records, and any academic transcripts early. A short personal statement about your goals, along with letters from mentors, employers, parole officers, or community leaders, adds credibility.

Taxes and Keeping Your Grant in Good Standing

Pell Grants and other educational grants are tax-free only to the extent you spend them on qualified education expenses: tuition, fees, and course-related costs like required books and supplies. Money used for room and board, travel, or other living expenses is taxable income.¹⁵ If a $7,000 Pell Grant covers $5,000 of qualifying costs, the extra $2,000 has to be reported. Business grants and vocational stipends are generally treated as taxable income unless a specific exclusion applies.

To keep a Pell Grant, maintain satisfactory academic progress as your institution defines it. Dropping below half-time or missing GPA requirements can end the award. If you are enrolled in a program funded by a federal grant, the organization running it has reporting obligations to the government, and you may be asked for surveys, enrollment or employment documentation, or check-in meetings as part of that reporting.¹⁶

Misusing grant funds carries administrative, civil, and criminal exposure, including prison time under the Criminal False Claims Act for knowingly submitting false information.¹⁷ Use every dollar for its intended purpose and keep records showing where it went.

1
Knowledge Center. 2026-27 Federal Pell Grant Maximum and Minimum Award Amounts
2
FSA Partners. FAFSA Simplification Act Changes for Implementation in 2024-25
3
Federal Student Aid. Eligibility for Students With Criminal Convictions
4
FSA Partners Knowledge Center. Eligibility of Confined or Incarcerated Individuals to Receive Pell Grants
5
FSA Knowledge Center. Final 2026-27 FAFSA PDF Form, FAFSA Form for Incarcerated Students, and FAFSA Submission Summary
6
Bureau of Justice Assistance. Second Chance Act Programs – Overview
7
United States Department of Justice. Justice Department Awards a Total of Nearly $100 Million To Help Reduce Recidivism and Support Successful Reentry To Communities
8
U.S. Department of Labor. Reentry Employment Opportunities
9
U.S. Department of Labor. US Department of Labor Awards $725K to Help At-Risk Workers
10
Internal Revenue Service. Work Opportunity Tax Credit
11
Office of the Law Revision Counsel. 26 USC 51 – Amount of Credit
12
Federal Register. Criminal Justice Reviews for the SBA Business Loan Programs, Disaster Loan Programs, and Surety Bond Guarantee Program
13
eCFR. Title 24, Part 5, Subpart J – Access to Criminal Records and Information
14
Grants.gov. Home
15
Internal Revenue Service. Publication 970 (2025), Tax Benefits for Education
16
eCFR. 7 CFR 4284.960 – Reporting Requirements
17
National Institutes of Health. Fraud, Waste and Abuse of NIH Grant Funds