The DHS Shutdown Just Froze Billions in FEMA Grants — Here Is What You Need to Know

Somewhere north of $3 billion in federal preparedness funding is sitting in a frozen pipeline right now, and nobody in Congress seems to be in a hurry to fix it.

The Department of Homeland Security partial shutdown — triggered February 14 when lawmakers couldn't agree on immigration enforcement reforms — has now stretched past the 11-day mark. While headlines have focused on suspended TSA PreCheck enrollment and furloughed border agents, the quieter crisis is hitting thousands of state agencies, local governments, and nonprofits that depend on FEMA grants to keep their communities safe.

FEMA's Grants Management System Is Down

FEMA's grants management system went non-operational when the shutdown began. That means no new grant processing, no disbursements on existing awards, and no technical assistance for applicants working through the system.

The programs affected are not small. The Urban Area Security Initiative (UASI), State Homeland Security Program (SHSP), Emergency Management Performance Grants (EMPG), and dozens of other FEMA preparedness programs collectively distribute billions annually to first responders, emergency managers, cybersecurity teams, and community resilience organizations across all 50 states and territories.

Organizations with open awards from FY2021 through FY2024 cannot receive scheduled payments. For smaller nonprofits and local agencies operating on thin margins, that cash flow disruption is already forcing difficult decisions about staffing and programming.

Who Is Affected

The blast radius extends well beyond obvious FEMA recipients. If your organization holds or has applied for any of these, you're in the freeze zone:

• Urban Area Security Initiative (UASI) grants for metropolitan area security
• State Homeland Security Program (SHSP) funding
• Emergency Management Performance Grants (EMPG)
• Nonprofit Security Grant Program (NSGP) — synagogues, mosques, churches, and community centers that received facility hardening funds
• Port Security Grant Program and Transit Security Grant Program
• Cybersecurity grants distributed through FEMA to state and local governments
• Anti-trafficking program funding administered through DHS

Even FEMA's disaster response operations are constrained. The agency now requires written DHS approval for any staff travel scheduled February 18 or later — a bureaucratic bottleneck that slows response times when every hour matters.

No Resolution in Sight

Congress left town for recess without resolving the impasse. The sticking point remains immigration enforcement language that Senate Democrats have refused to accept and House Republicans won't strip out. Unlike broader government shutdowns that tend to generate intense public pressure, this targeted DHS closure has received comparatively little attention — which means less political urgency to resolve it.

The last DHS-specific funding lapse, in 2015, lasted three weeks before a clean bill passed. This one could easily match or exceed that timeline, given the current partisan dynamics and the fact that lawmakers aren't even in Washington to negotiate.

What Grant Recipients Should Do Right Now

If you hold active FEMA grants or were planning to apply for upcoming cycles, here's how to protect your position:

Document everything. If the payment freeze is causing you to miss contractual obligations — vendor payments, hiring timelines, project milestones — document those impacts in writing now. When the shutdown ends and agencies begin processing the backlog, well-documented delay claims will move faster than retroactive reconstructions.

Don't let subaward timelines slip. If you're a primary recipient with subawardees, communicate proactively about the delay. Subawardees who don't understand what's happening may assume your organization is the bottleneck.

Watch for deadline extensions. Federal agencies typically extend application deadlines affected by shutdowns, but these extensions aren't automatic — they're announced program by program after operations resume. Monitor the FEMA grants page and your state administrative agency for updates.

Plan for a backlog. Even after funding resumes, FEMA will face a processing backlog. Grant reviews, award notifications, and disbursements that would normally take weeks could stretch into months. Build that delay into your financial planning.

The Larger Pattern

This is the second major disruption to federal grant operations in 2026, following the Grants.gov maintenance outage that took the entire federal application portal offline for nearly three days last week. For grant-dependent organizations, the compounding effect of repeated system disruptions — political and technical — makes the case for diversifying funding sources more urgent than ever.

The shutdown will end eventually. The backlog will clear. But organizations that use this window to audit their federal funding exposure and identify alternative revenue streams — state grants, foundation support, earned revenue — will be more resilient when the next disruption inevitably arrives.

Tools like Granted can help you identify and pursue alternative funding sources while your federal pipeline is stalled, so you're not left waiting on Washington to get back to work.