In our last article, we covered how federal grantmaking descended into chaos: executive orders pausing trillions in disbursements, political appointees reviewing applications for alignment with administration priorities, and billions in funding clawed back or canceled outright.
Since then, the picture has become more complicated and, in some respects, more stable. Here’s where things stand and what your organization should be doing about it.
SAMHSA Funding Has Largely Returned to Pre-Crisis Levels
The most dramatic event since our last update was a one-day reversal in January 2026. SAMHSA sent termination letters to more than 2,000 organizations, canceling roughly $2 billion in discretionary grants, then restored full funding less than 24 hours later following backlash from providers, lawmakers, and medical associations. No public explanation was given for either decision.
The year-end numbers turned out to be steadier than the January reversal suggested. SAMHSA’s full-year funding landed at $7.438 billion, a modest $65 million increase over FY2025, and a proposed consolidation of SAMHSA into a broader "Administration for a Healthy America" structure was not enacted as of mid-2026; SAMHSA has continued to operate as a distinct agency within HHS. Funding activity since has looked comparatively normal: nearly $800 million in block grants distributed in February, $69 million for serious mental illness and suicide prevention programs in March, and $255 million for the 988 Lifeline in May.
Most recently, on June 17, HHS announced more than $700 million in new behavioral health funding opportunities, including a new $96 million program (STREETS) targeting homelessness, substance use, and serious mental illness, plus $223 million for Certified Community Behavioral Health Clinics. Independent reporting has noted that some of this represents previously authorized funding being released rather than genuinely new money, which is worth knowing as you read the press coverage, though it doesn’t change what’s actually available to apply for.
The takeaway: funding exists again, roughly at prior levels. It is not the same as having predictable funding. Every dollar now comes with an explicit condition that continuation depends on alignment with SAMHSA, HHS, and Administration priorities.
A New Operational Risk: Submission Caps on NOFOs
Separately from the funding picture, a more practical problem has emerged for those actually writing these applications. SAMHSA has begun releasing NOFOs in large batches with compressed deadlines, and several recent NOFOs include a hard cap on the number of applications that will even be reviewed. This is not an isolated incident involving a single program. At least six SAMHSA NOFOs released in mid-June 2026 contain similar limitations, with caps set at 30, 50, 60, or 70 applications depending on the opportunity.
The FY 2026 Screening, Brief Intervention, and Referral to Treatment NOFO (TI-26-005), posted June 11 and due July 13, states: "SAMHSA will accept and review only the first 30 complete, successfully submitted, and high-quality applications received via eRA. Once this threshold is met, the submission portal will close, and no further applications will be considered" . With up to eight awards available, that cap works out to roughly four applications per award, a narrow field by any standard. The "Building Communities of Recovery" NOFO, posted five days later, set its cap at 70 applications against 27 expected awards, closer to two and a half applications per award.
This matters for two reasons. First, "high-quality" is undefined in any of these documents at the point of submission; there is no published rubric an applicant could check against before the portal closes, and SAMHSA’s basis for the numerical cutoffs is similarly unclear. Second, these NOFOs require substantial effort just to reach that gate. The SBIRT NOFO alone requires a 10-page narrative against weighted merit criteria, letters of commitment from credentialed treatment partners, a five-year budget and staffing plan, and 12 separate attachments. An organization can do all of that work in good faith and still never have it reviewed on the merits, simply because enough other applications cleared the portal first. That is a real cost to absorb on top of an already compressed timeline, and it rewards speed and existing capacity over need or program quality. It is worth noting that not every SAMHSA NOFO released during this period carries a cap, so applicants should check each notice on its own terms rather than assume the practice is universal.
The takeaway: treat every federal NOFO as though it might include a submission cap or an unusually short window, and prepare accordingly before the notice drops, if at all possible, not after.
A Larger Change Coming: The Uniform Guidance Overhaul
On May 29, 2026, OMB published a proposed rule revising 2 CFR Part 200, the Uniform Guidance, the government-wide framework governing nearly every federal grant and cooperative agreement. It is the most sweeping revision since the Uniform Guidance was finalized in 2013, more substantial in scope than the 2020 and 2024 amendments, and remains a proposal, not yet final. Comments are due July 13, 2026, with a proposed effective date of October 1, 2026, the start of FY2027.
A few provisions matter most for organizations in this space. The rule would formalize discretionary termination authority, allowing agencies to end an award at any time if it "no longer effectuates program goals, Federal agency priorities, or the national interest as they exist at the time of termination," separate from termination for noncompliance. It would also require a senior political appointee to review every discretionary award before issuance to confirm that it advances the administration’s policy priorities. Political appointees are explicitly prohibited from deferring to peer reviewers and may override scientific or technical review without cause. Both provisions formalize, in regulation, practices that have already been playing out informally over the past year. The rule would also eliminate fixed-amount awards in favor of cost-reimbursable structures, expand E-Verify requirements to all recipients and subrecipients, including community partners or subgrantees to whom federal dollars flow downstream, and require prior agency approval for conference attendance and publication costs; advertising costs would be presumptively disallowed. Indirect cost rate negotiation is explicitly excluded from this rulemaking, due in part to a FY2026 appropriations rider requiring agencies to hold rates steady. Organizations whose negotiated rates no longer reflect their actual administrative costs have no path to correction until that rider expires.
The takeaway: this remains a proposal, with a comment period open through July 13, but OMB intends to finalize it by October 1. If adopted as written, the discretionary termination and political pre-review provisions would convert what has been ad hoc administrative behavior into permanent regulatory architecture. Behavioral health organizations have a strong stake in the political pre-review and termination provisions; submitting comments before the July 13 deadline is a concrete step worth taking.
What to Do Now
- Review your award terms. Many federal grant agreements now include "termination for convenience" language, allowing agencies to cancel awards without cause. Check whether yours includes it and understand your appeal rights. If the proposed Uniform Guidance rule is finalized, this authority will be codified across all new federal awards, making what is now a negotiated clause a regulatory baseline.
- Watch the Uniform Guidance comment period. The deadline is July 13. Behavioral health organizations have a direct investment in two specific provisions: the political pre-review requirement, which would explicitly subordinate peer-reviewed merit to political judgment, and the discretionary termination authority, which would codify agencies’ ability to end any active award at any time. Both are worth commenting on.
- Build for speed. Keep SAM.gov, Grants.gov, and eRA Commons registrations current year-round. Keep boilerplate organizational sections, assurances, and standard attachments ready so you can quickly turn around a narrative when a NOFO drops.
- Diversify deliberately. The proposed rule would make termination-for-convenience standard across all new federal awards, meaning active grants are no longer a guaranteed income floor. Federal dollars cannot be fully replaced by state funding, philanthropy, or earned revenue, but organizations that have already built those relationships will be better positioned than those starting from scratch.
- Document your impact continuously. A clear, current, evidence-based record of your program’s outcomes is your strongest asset. Under political pre-review, applications are evaluated for alignment with administrative priorities, as well as for evidence and merit. Framing your outcomes in terms that connect to current priority areas, serious mental illness, homelessness, recovery, and workforce will matter more than it has in prior cycles.
- Stay networked. The January reversal happened because thousands of organizations, state partners, and advocacy groups spoke up together. Know your state association and national counterparts, and engage when they need you.
- Keep applying. Muscle memory matters. Career program staff have outlasted political appointees across every administration, and the organizations that continue applying are best positioned to move when opportunities open.
Federal grants remain a viable and necessary source of funding for health and human services providers. They are also, for now, a less predictable one. Preparation, not optimism or pessimism, closes that gap.