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The housing authority has fewer funds to pay for more expensive goods and services for the Beecher Terrace redevelopment.
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The Choice Supplemental grant can only be used for Beecher Terrace replacement housing units, the last of which will be complete by 2025.
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The Russell neighborhood received nearly $32 million in federal grants that have helped fuel a sweeping restoration.
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Part of that effort is to redevelop a section of Muhammad Ali Boulevard into an arts and culture district.
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Louisville is among five cities selected as finalists for a federal grant that, if awarded, would help fuel a major revitalization of Russell.