I have a friend who will be leaving federal prison soon to hopefully start over a new life. He heard that there is a grant available to assist convicted felons through local governments to help them with finances in job hunting, etc. Is there such a thing and where would I get information on that?

No, some places such as half way houses, non profit groups get funding to help with various projects, ( some job training)

He needs to check with his local PO, you can check with the local chamber of commerce, the local minister alliance of your area.