This bill, the "Choice Neighborhoods Initiative Act of 2025," authorizes the Department of Housing and Urban Development (HUD) to establish a competitive grant program aimed at transforming neighborhoods characterized by extreme poverty and severely distressed housing. The core purpose is to create sustainable, mixed-income communities with enhanced access to economic opportunities, quality services, education, public assets, and public transportation. The bill defines "extreme poverty" based on high poverty rates, elevated crime, vacant homes, or low-performing schools, and "severely distressed housing" as projects requiring major redevelopment due to physical deficiencies and contributing to neighborhood decline. Eligible applicants for these grants include local governments, public housing agencies, or nonprofit entities, with provisions for co-applicants such as community development corporations and certain for-profit entities. A key requirement for receiving a grant is the submission of a comprehensive "transformation plan" for an eligible neighborhood. This plan must detail how the neighborhood will be revitalized into a mixed-income area with safe, affordable housing and improved community resources. Mandatory activities under the transformation plan include the rehabilitation, preservation, or demolition and replacement of severely distressed housing, along with a strict one-for-one replacement of any public or assisted housing units that are demolished or disposed of. These replacement units must adhere to specific affordability, size, and location criteria, with at least one-third of replacement units for public housing located within the immediate area of the original site, unless specific exceptions apply. The bill also allows for a waiver of the one-for-one replacement requirement to 90 percent under certain market conditions or court orders. The legislation places a strong emphasis on resident protections and involvement. It requires applicants to determine resident preferences, ensure active participation of residents in planning and implementation, and hold public meetings. Crucially, it guarantees a "right to return" for displaced residents who were in compliance with their leases and remain eligible, providing them a preference for occupancy in revitalized or replacement housing. Grantees must also provide comprehensive relocation assistance, including tenant-based rental assistance, counseling, and payment of moving expenses, and monitor displaced households throughout the grant term. Beyond housing, the bill authorizes grants for a range of eligible activities designed to support the neighborhood's transformation. These include constructing or rehabilitating affordable housing, providing supportive services like job training, financial literacy, and healthcare, and establishing links to local education efforts. Funds can also be used for critical community improvements, economic development activities, and work incentives to promote self-sufficiency. However, there are limitations on funding for non-housing activities, with no more than 25 percent of the grant usable for such purposes, and specific restrictions on school construction. All activities must comply with fair housing and accessibility requirements, ensuring that revitalization efforts affirmatively further fair housing and that new construction and alterations meet accessibility standards. Grantees are required to maintain affordability for assisted properties for at least 30 years or longer if already subject to existing restrictions. The Secretary of HUD is tasked with establishing cost limits, overseeing environmental reviews, and requiring annual reports from grantees on the program's impact, including compliance with resident return and one-for-one replacement provisions. The bill also authorizes significant funding, with $1 billion for fiscal year 2026 and subsequent necessary sums, for grants and rental assistance.