Nearly $98 million in rental assistance is headed to states to help thousands of people with disabilities live in the community.

The federal money is expected to fund 3,530 housing units in 13 states for people who require long-term services and supports to live independently, the U.S. Department of Housing and Urban Development said this week.

Housing agencies within the states are now working with Medicaid and Health and Human Services officials to identify very low-income individuals with disabilities who are in need of the rental assistance. Federal officials say they expect many people receiving the new funds to be transitioning out of institutions.

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“Our nation is strongest when all our citizens are able to fully participate and contribute,” said Secretary of Health and Human Services Kathleen Sebelius. “This unique collaboration of federal and state agencies will enable thousands of Americans with disabilities to lead productive, meaningful lives in their communities.”

The rental assistance funds were made available under HUD’s Section 811 Project Rental Assistance Demonstration Program, which was established as part of a 2010 law in order to create community-based housing options for people with disabilities.

Thirty-five state housing agencies applied to participate in the first-ever distribution of money from the demonstration program, speaking to the heavy demand for housing assistance, according to officials at the Technical Assistance Collaborative, a nonprofit focused on promoting housing and community support services for those with disabilities.

Funds are headed to California, Delaware, Georgia, Illinois, Louisiana, Massachusetts, Maryland, Minnesota, Montana, North Carolina, Pennsylvania, Texas and Washington.