🎧 Listen to the summary:
The Trump administration’s immigration crackdown now runs through the nation’s disaster agency. In late March, the Federal Emergency Management Agency froze nearly $10 billion in previously approved disaster aid for nonprofit organizations while it reviewed whether the funding might benefit undocumented migrants, an effort undertaken to comply with a Feb. 6 executive order directing agencies to stop supporting nongovernmental groups that “undermine the national interest.” FEMA’s internal review spanned 56 programs across the agency; most were cleared to continue, but two major nonprofit programs were halted for deeper scrutiny. One is an $8.5 billion pot that helps hospitals, churches, and other nonprofits rebuild after disasters. The other provides $1.3 billion for short-term housing, including hotel rooms, for people displaced by catastrophes. The same review flagged two state emergency management grants totaling roughly $800 million annually, which remain on hold pending Department of Homeland Security review.
The pause was formalized in March 20 memos by then–acting FEMA Administrator Cameron Hamilton and approved days later by Homeland Security Secretary Kristi Noem. Former FEMA chief of staff Michael Coen said the freeze would slow community recovery because local nonprofits are central to disaster response and rebuilding. The agency’s own analysis concluded that most of its programs complied with the order, allowing tens of billions in aid to resume flowing to states even as the nonprofit funds stayed locked. The freeze was described as unrelated to public remarks from the secretary about eliminating FEMA.
The policy connects a border mission to a disaster bureaucracy. For years, FEMA has administered a Shelter and Services Program with U.S. Customs and Border Protection, which lacks its own grant-making infrastructure. As the White House broadened its enforcement push, four FEMA officials were fired after leadership accused them of authorizing payments for migrants’ hotel stays in New York City in violation of the president’s order. Elon Musk, who leads the administration’s Department of Government Efficiency, publicly claimed $59 million had been unlawfully spent on “luxury” hotels for migrants. Internal figures cited in reporting put the average nightly hotel cost at $156 for migrant families, well below typical New York hotel rates. The White House framed court challenges to the new orders as “unlawful injunctions” and said it expects to prevail.
Implementation has run through personnel changes as well as program reviews. Hamilton told House appropriators in mid-March that eliminating FEMA would not be in the country’s best interest, diverging from the secretary’s public argument for downsizing or scrapping the agency. He was removed days later and replaced by David Richardson, a former Marine and DHS official, who told staff he would push responsibilities down to states and expand cost-sharing. FEMA had earlier laid off hundreds of probationary employees and required many others to reapply for extensions through DHS, steps that left the workforce unsettled as hurricane season neared.
The broader blueprint behind these moves sits within a second-term agenda that envisions shifting disaster costs to states and shrinking the federal emergency footprint, including proposals to move FEMA out of DHS. Hamilton, a former Navy SEAL who had criticized FEMA on social media and advocated stronger southern border security, was named interim administrator before his departure. The Associated Press has reported that the plan would cap federal reimbursements and redirect agency focus in line with the administration’s border priorities.
The operating logic is straightforward. If nonprofit disaster grants can be used by recipients who also provide shelter or services to undocumented migrants, those grants must be paused until DHS is satisfied they do not “undermine” immigration enforcement objectives. The practical result is a new compliance layer for local hospitals, shelters, and faith-based groups seeking to rebuild roofs or replace generators after a storm. FEMA’s determination that most programs could proceed while a few underwent further review adds an administrative split-screen: states are told to keep rebuilding roads and schools, while nonprofits are told to wait for Washington to cross-check how a clinic or shelter’s work intersects with immigration policy.
The trade-offs emerge in the details. The nonprofit rebuilding program is often the only route to restore damaged facilities that anchor community response networks. Keeping $8.5 billion frozen and delaying $1.3 billion for short-term housing introduces cash-flow gaps for operators that typically front costs and seek reimbursement later. A finding of “high likelihood” that two state grant programs support nonprofits with immigration ties has produced a second bottleneck at the state level. Communities that are preparing for wildfire and hurricane seasons face shifting timelines as eligibility rules are reinterpreted through a border lens. Coen’s assessment that recovery will be adversely affected captures the quiet arithmetic of stretched budgets, delayed bids, and temporary closures.
There are inefficiencies and contradictions. The administration’s public case against “luxury” hotels relies on headline language that outpaces the underlying numbers. The average nightly cost cited for migrant families sits below New York’s typical hotel rates, even as leadership argues the spending violates policy. The same week the secretary approved memos allowing most disaster funds to flow, public comments suggested the entire agency should be eliminated. Inside FEMA, a leadership change followed testimony in favor of maintaining the agency’s role. These cross-currents create overlapping directives for staff and grantees, who must simultaneously accelerate recovery and await new compliance checks tied to immigration enforcement.
Another set of consequences is less visible. Workforce churn, emergency cost-shifts to states, and paused nonprofit reimbursements can widen gaps in shelters and clinics that often partner with federal agencies during disaster surges. Local officials who help coordinate evacuations and debris removal now navigate eligibility questions unrelated to flood maps or firebreaks. Communities that rely on faith-based or hospital systems as shelter hubs may find those partners waiting on DHS signoffs before reopening a wing or replacing damaged equipment. These ripple effects were not the stated goal of an immigration policy, but they now live inside the disaster-recovery workflow.
What happens next is procedural. DHS continues its review of the frozen nonprofit programs and the two state grant streams. Most FEMA funds to states are moving again, per the agency’s analysis and approval chain. Congressional oversight is ongoing through appropriations hearings where DHS leadership and FEMA officials have outlined competing visions for the agency’s future. Litigation over the administration’s immigration orders proceeds in parallel, with the White House signaling it expects to win on appeal. Communities and nonprofits await determinations that will decide when, and how, their disaster reimbursements resume.
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Lisa Grant reports on immigration enforcement, border operations, and national security protocols. She studied political science at Arizona State University and previously worked as a legislative staffer on immigration reform. Her reporting brings a field-level understanding of border policy and how it is applied in communities across the Southwest.
