Section 330 Grant Requirements: Eligibility, Governance, and Compliance

Section 330 grant requirements fall into three groups: who is eligible to apply, what the organization must do to operate a federally funded health center, and what it must keep doing to hold onto the award. The statute at 42 U.S.C. 254b sets the framework, and the Health Resources and Services Administration (HRSA) enforces it through its Compliance Manual, annual reporting, and site visits.¹ Organizations routinely spend a year or more preparing before submitting an application, and the reasons become clear once you look at what the program actually asks for.

Who Qualifies for a Section 330 Grant

Every applicant must fit one of four statutory designations. Community Health Centers serve broad populations in medically underserved areas. Migrant Health Centers serve seasonal and migratory agricultural workers. Health Care for the Homeless programs serve people living in shelters, on the street, or in transitional housing. Public Housing Primary Care grants fund clinics inside or immediately next to public housing developments.¹

The categories are not interchangeable. Each carries its own legal definition, and the population you propose to serve determines which designation applies. HRSA evaluates whether the proposed services genuinely match the chosen designation, and a mismatch can sink an application before it reaches merit review.

Look-Alikes Are a Separate Track

Some organizations meet every programmatic standard but do not receive Section 330 grant funding. These are Look-Alikes. They get access to 340B drug pricing and enhanced Medicaid and Medicare reimbursement under the Prospective Payment System, but they do not receive Section 330 funds, do not qualify for Federal Tort Claims Act malpractice coverage, and cannot access federal loan guarantees.² If you are searching for grant requirements but your realistic path is Look-Alike status, the operational rules that follow still apply; the funding and FTCA protection do not.

Clinical Services You Must Provide

Holding a Section 330 grant means delivering a defined set of primary and preventive services: basic diagnostic and laboratory work, screenings, preventive care, and pharmaceutical services. Grantees must also provide what HRSA calls enabling services, which cover language interpretation, transportation assistance, and case management that remove non-medical obstacles to treatment.³

Centers serving a significant number of patients with limited English proficiency have additional obligations. They must develop a plan for interpretation and translation services and train staff on cultural sensitivities.³

The Sliding Fee Discount Program

Every health center must operate a sliding fee schedule tied to the Federal Poverty Guidelines. Patients at or below 100% of the poverty level receive a full discount and can only be asked to pay a nominal charge. Patients above 200% pay the full fee. Everyone in between pays on a sliding scale.⁴

No patient can be turned away for inability to pay. That is a condition of the funding, not a best practice.⁴ Failing to maintain the sliding fee structure or refusing to serve uninsured patients puts the entire grant at risk.

Governance and Board Composition

Governance is where many applicants struggle. Federal law requires that at least 51% of board members be active, registered patients of the health center.⁵ The rule keeps decision-making with the people who actually use the services.

The board is not a ceremonial body. It must approve the selection and, if necessary, the dismissal of the CEO. It must review and approve the annual project budget, covering both federal and non-federal funds. It also adopts policies for financial management, service eligibility, personnel practices, and quality of care.⁶ HRSA reviews board minutes during compliance visits and will cite a board that rubber-stamps management decisions.

Health center employees and their immediate family members (spouses, children, parents, and siblings by blood, adoption, or marriage) cannot serve as voting board members. The CEO may sit on the board only as a non-voting, ex-officio member.⁵ Centers must verify board composition periodically, typically at least annually or when board terms are renewed.

What You Have to Do Before Applying

Two things must be in place before an application can even be submitted. First, an active registration in SAM.gov, which assigns the Unique Entity Identifier (UEI) required on all federal grant applications. Registration can take up to 10 business days to become active and must be renewed every 365 days.⁷

Second, a formal needs assessment for the proposed service area. The assessment documents the population’s most significant causes of illness and death, health disparities, and barriers to care. HRSA requires it to be completed or updated at least once every three years.⁸ A weak needs assessment is one of the fastest ways to lose points during merit review because it is the foundation for every other piece of the application.

What the Application Contains

The SF-424 is the official Application for Federal Assistance and captures the organization’s legal name, address, and total funding requested. It travels with a detailed budget narrative explaining how grant funds will be allocated across personnel, medical supplies, and other operational costs.

Three HRSA-specific forms document the scope of project:

Form 5A (Services Provided) lists each required and additional health service and specifies whether it will be delivered by in-house staff, formal contract, or referral arrangement.⁹
Form 5B (Service Sites) identifies each approved service location by name, address, and operational details.⁹
Form 5C (Other Activities) captures activities that do not occur at a fixed site, such as health fairs, home visits, and community immunization events.⁹

Applicants also identify the specific zip codes defining the target service area and project the number of unduplicated patients they expect to serve. Applications go in through Grants.gov and the HRSA Electronic Handbooks (EHB), independent review panels evaluate each proposal on merit, and successful applicants receive a Notice of Award (NOA) specifying the funding amount, budget period start date, and binding legal terms.¹⁰

The NOA is the legally binding document governing the award. Any conditions HRSA places on the grant appear there, and only written responses from the Grants Management Officer are binding when questions arise about the award’s terms.¹¹

What You Have to Keep Doing After the Award

Grantees report clinical outcomes and patient demographics annually through the Uniform Data System (UDS). UDS captures a standardized set of information for each calendar year, including patient characteristics, services provided, health outcomes, staffing levels, costs, and revenues.¹²

Approximately at the midpoint of each period of performance, HRSA conducts an Operational Site Visit (OSV) that reviews clinical records, financial documents, board meeting minutes, and governance structures.¹³ OSVs are where compliance problems most commonly surface.

Procurement and Budget Controls

Section 330 grantees follow the federal procurement standards in the Uniform Guidance. The core rule is full and open competition. Micro-purchases below the health center’s self-certified threshold (up to $50,000) do not require competitive quotes if the price is reasonable and documented. Amounts above the micro-purchase threshold but below the simplified acquisition threshold require price quotes from multiple qualified sources. Larger purchases require sealed bids or competitive proposals with public notice and documented evaluation criteria.¹⁴

Sole-source contracting is permitted only in narrow circumstances, such as when a product is genuinely available from only one supplier or during a documented emergency. An independent cost estimate must be prepared before receiving bids on any procurement above the simplified acquisition threshold, and cost plus a percentage of cost contracting is prohibited.¹⁴

Grantees must obtain HRSA’s prior written approval before any cumulative budget transfer exceeding 25% of the total approved budget, or any change in project scope.¹¹

Single Audit

Any health center that spends $1,000,000 or more in federal awards during a fiscal year must undergo a Single Audit. The threshold increased from $750,000 under updated OMB guidance, effective for audit periods beginning on or after October 1, 2024.¹⁵ Most Section 330 grantees will comfortably exceed this threshold.

FTCA Deeming

Compliant health centers can apply for coverage under the Federal Tort Claims Act, which treats employees as federal employees for medical malpractice liability and replaces the need for private malpractice insurance. Coverage is not automatic. Health centers must submit a deeming application to HRSA every year to establish or renew FTCA status.¹⁶ Missing the annual filing means operating without federal malpractice protection until the next cycle.

What Happens If You Fall Out of Compliance

When HRSA finds a compliance problem, it does not immediately pull the grant. It follows a progressive action process:

Phase One gives the health center 90 days to submit documentation proving compliance or an acceptable corrective action plan.
Phase Two adds 60 days if Phase One does not resolve the issue.
Phase Three provides a final 30-day window to respond.
If HRSA approves a corrective action plan during any phase, the center receives 120 days to implement it and demonstrate compliance.¹⁷

A center that exhausts all three phases without resolution can have its period of performance shortened or its award terminated. HRSA can also bypass progressive action entirely for serious situations, including patient safety threats, illegal prescribing, misrepresentation of compliance status, ceasing operations, or appearing on the HHS Office of Inspector General’s exclusion list. Immediate remedies include withholding payments, suspending award activities, or initiating debarment.¹⁷

1
Office of the Law Revision Counsel. 42 USC 254b – Health Centers
2
Health Resources and Services Administration. Health Center Program Look-Alikes
3
Health Resources and Services Administration. Health Center Program Compliance Manual – Chapter 4: Required and Additional Health Services
4
Health Resources and Services Administration. Health Center Program Compliance Manual – Chapter 9: Sliding Fee Discount Program
5
Health Resources and Services Administration. Health Center Program Compliance Manual – Chapter 20: Board Composition
6
Health Resources and Services Administration. Health Center Program Compliance Manual – Chapter 19: Board Authority
7
SAM.gov. Entity Registration
8
Health Resources and Services Administration. Health Center Program Compliance Manual – Chapter 3: Needs Assessment
9
Health Resources and Services Administration. Documenting Scope of Project
10
Health Resources and Services Administration. Navigating the HRSA Electronic Handbooks
11
Health Resources and Services Administration. FY 2026 HRSA General Terms and Conditions
12
Health Resources and Services Administration. 2025 Uniform Data System Reporting Manual
13
Health Resources and Services Administration. Health Center Program Site Visit Protocol
14
eCFR. 2 CFR Part 200 Subpart D – Procurement Standards
15
Office of Inspector General. Single Audits Frequently Asked Questions
16
Health Resources and Services Administration. FTCA Frequently Asked Questions
17
Health Resources and Services Administration. Health Center Program Compliance Manual