The president’s budget request for fiscal year 2027, submitted to Congress this month, includes a $10.7 billion reduction in funding for the U.S. Department of Housing and Urban Development (HUD).
The budget requests $73.5 billion for HUD, a 13 percent reduction from what Congress enacted for fiscal year 2026.
The proposed spending plan also:
- Eliminates several large programs that help preserve and build affordable homes, such as the HOME Investment Partnerships Program and the Community Development Block Grant.
- Includes work requirements and time limits for those receiving rental assistance.
- Adjusts housing funding and programming within the U.S. Department of Agriculture (USDA)—particularly programs that serve rural communities—and the U.S. Department of the Treasury.
Context: Congress is responsible for setting funding levels for federal agencies and is not required to follow the president’s proposed budget. In 2026, for instance, it didn’t adopt major HUD cuts in the president’s budget proposal; in fact, it increased it from the prior year.
What’s Next: It’s early in the budget process. Next, Congress will review the president’s request and hold hearings to evaluate agency spending levels and policy priorities before writing its own spending bills. Those bills will also go through several rounds of hearings and negotiations. While the next fiscal year begins Oct. 1, there are often delays in the process that can push budget passage into the new year.
Read more below about the proposed changes.
Section 8 Vouchers
The budget request includes $38.8 billion for the Housing Choice Voucher program—a roughly 1 percent increase in spending over FY 2026. The program, also known as Section 8, is the main way the federal government helps very low-income renters—disproportionately people of color, older adults, and people with disabilities—afford homes in the private market by capping tenant rent contributions at about 30 percent of their income.
- The White House framed the increase as enough to renew existing vouchers rather than to expand the program.
- The proposal adds a policy rider that would bar public housing agencies from issuing new vouchers or assisting new families, including through new project-based voucher commitments, with narrow exceptions for HUD-VASH and Family Unification Program vouchers.
- The budget also seeks permanent authority for HUD to implement work requirements and time limits for voucher households (with some exemptions), thereby embedding behavioral conditions into what is now a purely income-based benefit.
Context: Today, fewer than 1 in 4 income-eligible households receive Section 8 rental assistance. Blocking new households from receiving vouchers—while layering on work requirements and time limits—would deepen the gap between the scale of need and the program’s reach, and could push some current recipients off assistance entirely.
What They’re Saying: Housing advocates are urging Congress not only to boost voucher funding beyond the president’s request but also to explicitly reject the “no new vouchers” provision, allowing agencies to continue reissuing vouchers when current recipients leave the program.
Project-Based Rental Assistance
The budget request includes an almost 5 percent cut for Project-Based Rental Assistance (PBRA), which subsidizes rents in certain privately or nonprofit-owned buildings, providing deeply affordable homes to approximately 1.3 million low- and very low-income households, many of whom are seniors or people with disabilities and have few other options in their communities.
- The budget requests $17.6 billion for the PBRA program, plus $529 million for Performance-Based Contract Administrators who oversee the long-term subsidy contracts.
- As with vouchers, the budget would allow HUD to require multifamily properties receiving federal rental assistance to implement work requirements and time limits for certain assisted families, despite limited evidence that such conditions improve tenants’ economic outcomes.
What They’re Saying: The administration says the request is sufficient to renew existing contracts, but owner groups and advocates warn that flat or reduced funding, against higher operating and insurance costs, can strain building finances and accelerate the slow attrition of these properties from the affordable stock.
Context: Compared with last year’s talk of consolidating HUD’s rental assistance programs into a state-based block grant program, the FY 2027 proposal is less structurally disruptive but still follows the same pattern of gradually shrinking the number of deeply subsidized units while tightening behavioral requirements for those who remain housed. Because PBRA contracts run for many years, even relatively small shortfalls in annual appropriations can have outsized effects, making this a line item where appropriators’ decisions in 2026 will reverberate through the next decade of preservation efforts.
Public Housing
The budget proposes $8.6 billion for the Public Housing Fund in FY 2027, a roughly 4 percent increase over FY 2026. Public housing provides some of the deepest and most stable affordability in the country, serving roughly 1.6 million low-income households in developments owned by local public housing agencies, with rents generally set at 30 percent of household income.
- The Public Housing Operating Fund would receive a roughly $690 million (roughly 15 percent) increase over FY 2026—sizable but still below what formulas indicate agencies need to fully operate their portfolios.
- The proposed budget would hold the Capital Fund at $3.2 billion, despite a massive national backlog of public housing repairs and rehabilitation needs in aging properties.
- It also includes a proposal to allow HUD to impose work requirements and time limits on public housing residents, mirroring the approach proposed for Section 8 voucher holders and PBRA households.
Context: The operating increase will help agencies cover utilities, staffing, and basic repairs, but leaving capital funding as is does little to address a backlog of long-deferred repairs and modernization needs (estimated to be in the tens of billions of dollars). The coming appropriations fight will determine whether this year’s operating increase is a floor, a ceiling, or a bargaining chip in broader negotiations over HUD’s role in providing permanent, deeply affordable homes.
The HOME Investment Partnerships Program
While the federal housing bills passed by Congress permanently reauthorize the HOME program, they don’t allocate any funding to it—and neither does the president’s proposed budget.
Why It Matters: HOME is a relatively flexible block grant that’s often used to fill gaps in complicated development projects. It is one of the few programs available to develop affordable homes intended for owner-occupants.
What Happened Last Time? The president’s proposed FY 2026 budget also zeroed out HOME, but Congress restored the full $1.25 billion from the previous year.
Community Development Block Grant Program
The proposed budget again seeks to eliminate the CDBG program, as did the proposed FY 2026 budget.
Why It Matters: CDBG, established in 1974, is one of the most flexible funding sources for local governments. CDBG projects must serve low- and moderate-income people, address urgent health and safety needs, or help eliminate “slums and blight.” Adjusted for inflation, funding for the program has been shrinking steadily since 2001.
What Happened Last Time? Congress restored the previously allocated $3.3 billion for the program for FY 2026.
Funding for Older Adults and People With Disabilities
The proposed budget contains modest cuts to Section 202 (housing for older adults) and Section 811 (housing for people with disabilities). Unlike last year’s proposed budget, this one does not propose eliminating these programs and rolling them into a single block grant.
Why It Matters: The number of older adults and people with disabilities is rising sharply as baby boomers hit retirement age and long COVID continues to disable people. Thus, even level funding would mean these programs would do less well at meeting needs than they have.
Rural Housing
The president’s proposal offers a mixed bag for rural housing programming that falls under the purview of the USDA. Some of the key takeaways:
- The proposal includes a roughly 5 percent increase to the Section 521 Rental Assistance program.
- Funding for the Section 515 Rural Rental Housing Program remains unchanged.
- It eliminates the Section 542 voucher program, which is receiving $48 million this year.
What They’re Saying: The proposals fare slightly better than those in the FY 2026 budget, according to the Housing Assistance Council, a nonprofit that supports rural, low-income households. But, the organization is gravely concerned about cuts and underfunding in the proposed budget, “HAC urges Congress to strengthen the FY 2027 budget by restoring technical assistance for rural housing preservation.”
Native Housing
The proposed budget slashes hundreds of millions of dollars in funding for native housing programs in HUD’s budget, including:
- A 22 percent cut to the Native American Housing Block Grant (also called the Indian Housing Block Grant), which provides funding for housing projects for low-income tribal households, competitive grants, and the Indian Community Development Block Grant program.
- The elimination of the Native Hawaiian Housing Block Grant, which provides affordable housing assistance to low-income Native Hawaiian households.
What Happened Last Time? Congress rejected similar cuts in 2026, according to Tribal Business News.
Construction and Preservation of Affordable Homes
As in FY 2026, the budget request includes proposals to zero out funding for:
- The Pathways to Removing Obstacles to Housing Competition, which issues grants to states and local governments to boost affordable housing with interventions such as zoning reform. Last year, the program received $50 million.
- The Preservation and Reinvestment Initiative for Community Enhancement (PRICE) program, which issues grants for manufactured housing, including for maintenance, repairs, and resident services. PRICE grants didn’t receive funding in the final FY 2026 budget, either.
Family Self-Sufficiency Program
The budget would eliminate the Family Self-Sufficiency (FSS) Program, which allows some families receiving rental assistance to accrue savings when their incomes increase. Last year, the final budget for the program was $156 million.
- The Trump administration criticized the program’s performance in a recent issue of Cityscape, instead recommending interventions such as “work requirements or time limits.”
- The budget also cuts the Jobs Plus pilot initiative, a program that received $10 million last year. Jobs Plus similarly encourages public housing residents to work: Participants are exempt from rent increases when their salaries increase, and they receive employment help.
Why It Matters: One problem for families receiving federal rental assistance is that their rent increases when their incomes increase. The FSS Program presents an alternative.
Fair Housing
The budget proposal includes just $26 million for Fair Housing and Equal Opportunity, all dedicated to the Fair Housing Assistance Program (FHAP), which funds state and local agencies to handle housing discrimination cases. It eliminates the Fair Housing Initiatives Program (FHIP), which funds private fair housing nonprofits that do the same.
- In a fact sheet accompanying the budget proposal, the Trump administration blamed “radical leftist organizations” for waging a “war on suburbs” through FHIP grants.
- This isn’t new. Last year, HUD and DOGE cut most FHIP funds, leading to a lawsuit. A temporary restraining order required HUD to bring back the funds.
Why It Matters: According to the National Fair Housing Alliance, organizations that receive FHIP funding handle nearly three-quarters of the country’s housing discrimination complaints. There are “at least 12 states and many localities” that don’t have FHAP-funded agencies.
Homelessness Assistance
The proposed budget would eliminate the Continuum of Care (CoC) program—which received around $4 billion in FY 2026—and instead allocate funding to an Emergency Solutions Grant program, funded at 290 million in 2026. The CoC program is the main federal funding source for addressing homelessness.
- Overall, funding for homelessness programming was cut by $393 million.
- This change shifts homeless services funding from permanent supportive housing to transitional housing solutions and supportive services. The administration made a similar proposal last year, though it didn’t succeed.
- This change is in line with the Trump administration’s attitude toward Housing First, which the budget request calls “a profound failure.”
- The administration is currently embroiled in an ongoing lawsuit over its attempt to overhaul a Biden administration notice of funding opportunity for CoC grants.
What They’re Saying: The National Alliance to End Homelessness says the proposed budget would threaten to drive people back into homelessness and put people with disabilities and older adults at greatest risk.
Housing Counseling
In FY 2026, the Trump administration proposed eliminating funding for the Housing Counseling Assistance program; however, Congress kept funding at the previous year’s $57.5 million. For FY 2027, the administration has again proposed zeroing out the program.
- The proposal puts the jobs of over 4,200 counselors at risk and would reduce consumer access to professional housing counseling support.
Why It Matters: The Housing Counseling Assistance program is a low-cost program that provides homebuyers with expert, confidential advice to preserve credit; helps families financially prepare for homeownership; and/or helps keep families in their current homes. The program operates through partnerships with housing counseling agencies and through a network of over 4,200 HUD-certified housing counselors nationwide. The loss of this network would make it harder for low-income families to stay housed.
CDFI Fund
The administration proposes cutting the Community Development Financial Institutions (CDFI) Fund to $119.5 million (a 63 percent cut). The CDFI Fund, established in 1994, is part of the U.S. Department of the Treasury’s budget. It offers financial and technical assistance grants to support a network of over 1,400 federally certified community development banks, credit unions, depository institution holding companies, loan funds, and venture capital funds that provide financial services tailored to meet housing and business needs in low-income communities.
The president’s proposal:
- Earmarks approximately $100 million of CDFI Fund funding for a new rural initiative.
- Doesn’t allocate funding toward Native CDFIs, compared to $28 million in FY 2026.
Why It Matters: A federal report noted that CDFI funding in FY 2024 helped finance the development of over 45,000 affordable housing units while providing loans to more than 109,000 businesses. The CDFI network has been a major part of enabling credit to reach underserved neighborhoods, as evidenced during the COVID-19 economic shutdown, when CDFIs stepped in to ensure that Paycheck Protection Program dollars reached business owners of color.
What Happened Last Time? In FY 2026, the Trump administration proposed cutting funding for the CDFI Fund from $324 million in FY 2025 to $134 million; however, Congress maintained funding at $324 million. Congress will likely maintain funding levels, as the CDFI Fund enjoys considerable support among both Democratic and GOP lawmakers.
But the Story Does Not End There: A March 2026 public letter from a dozen nonprofits notes that CDFIs have yet to receive over $1 billion in already appropriated funds (including CDFI Fund dollars allocated for FY 2025 and FY 2026)—enough money, the nonprofit Opportunity Finance Network estimates, to support “the construction or rehabilitation of 100,000 affordable homes.”
NeighborWorks America
The administration again proposes eliminating funding for NeighborWorks America, a nonprofit organization that supports nearly 250 nonprofit housing and community development organizations. NeighborWorks affiliates have provided housing and related services to more than 416,000 individuals and families, according to a performance report to Congress. (Editor’s note: NeighborWorks America provides financial support for some of our work.)
The budget proposes reducing the organization’s funding from $158 million to just $15 million, with the funds dedicated solely to “wind down” its programs and operations.
- The budget proposes reducing the organization’s funding from $158 million to just $15 million, with the funds dedicated solely to “wind down” its programs and operations.
Why It Matters: The NeighborWorks network allows federal funds to be used flexibly to meet local organizational needs, whether for operating support or filling affordable financing gaps. A 2025 Urban Institute report cited this flexibility and found that “NeighborWorks America’s ability to respond quickly and mobilize housing counselors across the country is an effective approach to respond to unexpected crisis situations.” A loss of NeighborWorks funding could endanger this flexible federal community development response ability.
What Happened Last Time? The president’s FY 2026 budget proposal made a very similar request, but Congress opted to keep the program funded at FY 2025’s $158 million. The fact that this proposal was made and rejected last year makes a similar outcome for FY 2027 likely but not certain.
Compiled by Shelby R. King, Miriam Axel-Lute, Lara Heard, Steve Dubb, and Lillian M. Ortiz.
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