The Housing Assistance Council is an independent, non-partisan and regularly responds to Congressional committees, Member offices, federal agencies, and policy advocacy coalitions with the research and information needed to make informed policy decisions. Our research work, Rural Data Portal, and Veterans Data Central all provide valuable, educational context to frame the rural policy conversation. If you want to know how a new program or policy could impact America’s small towns and rural places, please don’t hesitate to contact us at policy@ruralhome.org.

House subcommittee advances FY27 HUD funding bill

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On May 21 the House Transportation-HUD Appropriations Subcommittee approved a fiscal year 27 funding bill that rejects many cuts proposed in the administration’s budget but would provide some programs with lower dollar amounts than they received in FY26. Details are shown in the table below.

— Information about FY27 funding for the U.S. Department of Agriculture’s rural housing programs is available here. —

The HOME program would be reduced from $1.25 billion in FY26 to $500 million in FY27, while Community Development Block Grants would remain at $3.3 billion. Native American housing would receive a moderate increase overall. The Continuum of Care program would not be eliminated, as the administration’s budget proposed, but its funding would be reduced. Fair housing would also be cut back, but the bill would not eliminate the Fair Housing Initiative Program, which was targeted in the budget proposal. Similarly, it would shrink but not zero out funding for housing counseling.

The bill would eliminate Build America, Buy America requirements for the HOME, CDBG, Public Housing Operating and Capital Funds, the Self-Help Homeownership Opportunity Program, and Native American programs in FY27 and prior years.

The full House Appropriations Committee is scheduled to mark up the bill on June 3. The Senate committee has not yet released a bill or announced a schedule for considering one.

Table: HUD Funding Levels

Program ($ in millions)

FY26 Final

FY27 Budget

FY27 House

FY27 Senate*

FY27 Final*
CDBG

$3,300

0

 $3,300
HOME

1,250

0

 500
PRICE Manuf. Hsg. Prsrv.

0

0

 0
Self-Help Hmownrshp (SHOP)

12

16**

 12
Veterans Home Rehab

0

0

 0
Rural Cap’y Bldg (RCB)

7

0

 6
Tenant-Based Rental Asst.

38,439

38,846

 38,083
     VASH

15

0

 0
Project-Based Rental Asst.

18,143

17,640

 18,975
Public Hsg. Capital Fund

3,200

3,200

 2,286
Public Hsg. Operating Fund

5,024

5,377

 4,737
202 Hsg. for Elderly

1,031

959

 1,062
811 Hsg. for Disabled

287

266

 296
Native Amer. Hsg.

1,354

887

 1,400
     Native Hawaiian

22.3

0

 15
     Tribal HUD-VASH

10

10

 10
Homeless Asst. Grants total

4,417

4,024

 4,161
     Emergency Solutions Grants

290

4,024

 290
     Continuum of Care

4,010

0

 3,779
      Permanent Supportive Housing

52

0

 52
Hsg. Oppties for Persons w/ AIDS (HOPWA)

529

0

 529
Fair Hsg.

86.4

26

 48.5
Healthy Homes & Lead Control

296

110

 296
Hsg. Counseling

57.5

0

 26

* These columns will be filled in as the appropriations process moves forward.

**The budget proposes $16 million to be earmarked for Habitat for Humanity’s SHOP and Section 4 technical assistance activities. Other SHOP grantees such as HAC would receive no funding.

HUD Budget Would Eliminate Several Programs, Cut Others

April 3, 2026 – As it did last year, the administration proposes to eliminate the HOME and Community Development Block Grant programs at the Department of Housing and Urban Development. Its budget request for fiscal year 2027, released on April 3, would also cut funding for Native American and Native Hawaiian housing, defund capacity building programs including the Rural Capacity Building program, earmark all Self-Help Homeownership Opportunity funds to Habitat for Humanity, and completely revamp the federal approach to aiding people experiencing homelessness.

A recording of a HAC webinar held on April 8 is available here. Panelists covered what the budget includes for rural housing programs at USDA, HUD, and the CDFI Fund, and what the rest of the funding process will look like.

Consistent with changes the administration has proposed for the FY24-26 Continuum of Care program, which have been challenged in court, the budget would direct its entire $4.02 billion in homeless funding to the Emergency Solutions Grants program and none to Continuums of Care. ESG funds, $290 million in FY26, are distributed to state and local governments. The budget proposes language to prioritize this ESG spending on transitional housing, to allow preferences for elderly people or those with disabilities, and to give HUD special flexibility in administering the program.

Native American housing funds would be reduced by one-third. Fair housing would also see a large cut: the Fair Housing Assistance Program, which funds state fair housing activities, would receive $26 million, slightly below its $26.4 million level in FY26. No funding would be provided for the Fair Housing Initiative Program, fair housing training, or assistance for people with limited English proficiency.

Public housing agencies would be required to impose work requirements for most people receiving rental assistance, and households would be limited to five years of aid.

A new $30 million program would combat fraud, waste, and abuse in federally assisted housing.

Next Steps

This budget represents the first step in a lengthier process to set appropriations for FY27. Both the House and the Senate will develop their own appropriations bills, which may or may not resemble the President’s proposal. The House and Senate should resolve any differences between their bills and send final versions to the President for signature by September 30. If they do not meet that deadline, a continuing resolution would be needed to keep the government running.

For ongoing news on appropriations and other topics related to rural housing, subscribe to HAC emails, which include the free biweekly HAC News.

 

Housing Assistance Council (HAC) Statement on Passage of House Housing Bill

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Housing is the largest monthly expense for American families, and the housing affordability crisis is as urgent in small town and rural America as it is in the nation’s cities and suburbs. Over one-third of rural households are considered housing cost-burdened—paying more than 30 percent of their income toward rent or a mortgage.

On May 20, the U.S. House of Representatives passed a revised bipartisan housing supply and affordability package that includes longstanding rural priorities. This is the much-anticipated next step in the nearly year-long bicameral, bipartisan process of negotiating a package of reforms to modernize federal housing programs. HAC applauds the House for this important step forward.

The House version of the 21st Century ROAD to Housing Act includes several bills that HAC strongly supports, most significantly the Rural Housing Service Reform Act, led by Congressmen Nunn (R-IA) and Cleaver (D-MO) and Senators Smith (D-MN) and Rounds (R-SD). This bill would provide the United States Department of Agriculture’s (USDA) Rural Housing Service (RHS) with new tools to address the preservation of its critical multifamily portfolio; authorize successful pilot programs; modernize the single-family housing programs; and improve USDA’s internal infrastructure, technology, and reporting.

“We are thrilled to see support for top rural housing priorities in the House as part of this revised bill,” said David Lipsetz, President and CEO of the Housing Assistance Council. “For decades, USDA’s RHS has been a lifeline for rural families, seniors, and workers, investing in both rental housing and homeownership. The revised House housing package would make sure these programs remain sustainable and well-run into the future.”

Other key provisions would help rural communities address their disproportionate repair needs generated by aging housing stock often coupled with low home values and confront less red tape around environmental reviews where USDA and HUD jointly fund a housing project.

This package began to come together at the initiative of the Senate Banking Committee in the summer of 2025 and has evolved through several iterations between the House and Senate since. Last month, over 200 national and local organizations signed on to a letter circulated by HAC supporting the inclusion of the RHS Reform Act in any final negotiated package.

This revised House bill reflects significant bipartisan collaboration and a very positive step forward for this package. At a time when affordability, and especially housing affordability, is top-of-mind for most Americans, we urge Congress to continue moving forward to bring this package to the President’s desk.

FEMA Review Council Report Recommends Increasing State and Local Responsibility

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On May 7, the FEMA Review Council established by President Trump in January 2025 released its final report. The council’s ten key recommendations emphasize shifting responsibility for disaster preparation and mitigation to state, local, territorial, and Tribal governments, with the federal government playing a supporting role. Several suggestions are intended to improve FEMA’s efficiency and response speed. States would be required to spend a certain amount of their own funds, depending on size, before federal funds would be available. Individual assistance would consist of a single payment of no more than $150,000 to residents whose homes are uninhabitable after a disaster, with a focus on emergency and temporary housing. Private insurance companies would have primary responsibility for permanent housing. Private companies would also have a greater role in providing flood insurance. The report notes that many of its recommendations could be implemented only through legislation.

Download the report.

House Committee Advances FY27 Funding Bill for USDA

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April 30, 2026 – The House Appropriations Committee approved its FY27 funding bill for USDA on April 29. There is no indication yet when the bill might be considered on the House floor or when the Senate may begin work on its version of the measure.

— Information about FY27 funding for the Department of Housing and Urban Development is available here. —

The dollar amounts passed by the committee are shown in the table below. The bill also takes steps to undo the administration’s recent changes to the Section 502 direct program. First, it requires the Section 502 direct loan limit to remain at 80% of HUD’s limit unless USDA lowers it through a formal rulemaking procedure.

Second, the non-binding report that accompanies the bill “encourages” USDA to eliminate the new requirement for multiple reviews by State Directors and requests extensive reporting back to the committee:

The Committee notes that revisions to the Section 502 handbook issued by RHS on February 10, 2026, made substantial changes in the Section 502 direct loan program, including lower limits and review of eligibility and loan approval by State directors of all Section 502 loans. The bill includes language prohibiting RHS from implementing the loan limit change that has negatively impacted certain areas of the country and directs RHS to revert to the previous loan limit immediately. The Committee is also concerned that recent changes requiring multiple State Director reviews of individual loan applications may introduce unnecessary delays in program delivery and encourages the Department to revert to a single review pending any future changes developed through notice-and-comment rulemaking.
The Committee directs the RHS Administrator to provide monthly briefings on this program, including analyses and impact on rural families seeking homeownership loans. Briefings shall include, by State, information on the number and dollar amount of Section 502 loans made and the number and dollar amount of loan applications on hand. The Committee is also aware that over 1,000 loan applications were on file at RHS before implementation of the handbook revisions. RHS is directed to provide a report on those loan applications, the number approved, the number rejected due to the handbook revisions, and what measures RHS is taking to assist loan applicants who were rejected due to the handbook changes. RHS is also directed to provide information to the Committee on loan processing time by State and to provide a comparison with processing time for fiscal year 2025.

Neither the bill nor the report addresses USDA’s changes to loan packaging fees.

House Proposes to Hold Most Rural Housing Programs at FY26 Funding Levels

April 22, 2026 – The House Appropriations Committee has released its proposed FY27 funding bill for USDA. As shown in the table below, the bill would keep almost all of the rural housing and community facilities programs at their FY26 dollar levels. It would increase Section 502 guaranteed lending and Section 521 Rental Assistance, as requested in the administration’s budget. It would continue to allow decoupling of Rental Assistance from Section 515 or 514 mortgages when those mortgages end, with a limit of 5,000 units.

The House agriculture appropriations subcommittee will mark up this bill on Thursday, April 23. The full committee is scheduled to review it on April 28.

The process to set appropriations for FY27 is still in its very early stages. Both the House and the Senate will develop their own appropriations bills, which may or may not resemble the President’s proposal. The House and Senate should resolve any differences between their bills and send final versions to the President for signature by September 30. If they do not meet that deadline, a continuing resolution would be needed to keep the government running.

For ongoing news on appropriations and other topics related to rural housing, subscribe to HAC emails, which include the free biweekly HAC News.

Table: USDA Rural Housing Service Funding Levels

Program

($ in millions)

FY26 Final

FY27 Budget

FY27 House

FY27 Senate*

 FY27 Final*
502 SF Direct Loans

$1,000

$983.2

 $1,000
     Nat. Amer. SF Demo

5

0

 6
502 SF Guar. Loans

25,000

20,000

 25,000
504 VLI Repair Loans

25

25

 25
504 VLI Repair Grants

21

20

 **
515 MF Direct Loans

50

50

 50
514 Farm Labor Hsg. Loans

15

15

 15
521 Rental Asst.

1,715

1,795

 1,795
523 Self-Help TA

25

25

 25
533 Hsg. Prsrv. Grants

6

6

 **
538 MF Guar. Loans

400

500

 400
542 Vouchers

48

0

 48
Rental Prsrv. Demo (MPR)

30

30

 30
Rental Prsrv. TA

2

0

 0
Rural Cmty. Dev’t Init.

5

0

 5
Cmty. Facil. Direct Loans

1,250

1,250

 1,250
Cmty. Facil. Grants***

13

0

 19.4
    Tribal Colleges CF Grants

8

0

 8
Cmty. Facil. Guar.

650

650

 650

*These columns will be filled in as the appropriations process moves forward.

**The House bill would provide a total of $26 million for Section 504 grants and Section 533 Housing Preservation Grants.

***The amounts shown here for CF grants are for competitive grants. The final FY26 appropriation and the House FY27 bill include significant additional funds for “Community Project Funding” or “Congressionally Directed Spending” — earmarks.

Abbreviations key

  • NA: Not Available
  • MF: Multifamily (Rental)
  • SF: Single-Family (Homeownership)
  • TA: Technical Assistance
  • VLI: Very Low-Income

USDA’s Rural Housing Budget Supports Most Programs

April 3, 2026 – The administration’s budget request for fiscal year 2027 was released on April 3. The proposals for USDA’s rural housing programs are slightly better than those in the FY26 budget.

Join HAC on April 8 at 2:00 pm Eastern time to learn more about the budget. In this webinar, HAC policy staff will cover what the budget includes for rural housing programs at USDA, HUD, and the CDFI Fund, and what the rest of the funding process will look like. Register here.

Homeownership

Last year USDA proposed to defund the Section 502 direct program but this year it suggests a $983 million program level. USDA estimates this amount will finance 5,355 homes.

The budget would eliminate the $5 million relending program that enables Native Community Development Financial Institutions to provide mortgages for Native American homebuyers.

The budget would change the current mortgage requirement for homeowners obtaining Section 504 repair loans. It would allow loans of up to $15,000 – rather than the current $7,500 – to be secured by a promissory note rather than a mortgage.

The administration would continue to support local organizations administering self-help programs under Section 523, despite its recent defunding of technical assistance providers to help them.

Rental Housing

The budget includes support for some of the elements of USDA’s rental preservation work, proposing to hold the Section 515 and Multifamily Preservation and Revitalization (MPR) programs at their FY26 levels. It would not, however, provide returns on investment or asset management fees for nonprofit and public agency owners. And it would not fund technical assistance to help nonprofits and public agencies purchase properties in need of preservation; USDA explains that it expects carryover funding from prior years to be sufficient to satisfy the demand.

The budget again supports decoupling Section 521 Rental Assistance from Section 515 and Section 514 mortgages, allowing tenants in rental properties where USDA mortgages are ending to continue to receive Rental Assistance. There would be no limit on the number of these Stand-Alone Rental Assistance (SARA) units.

Relying on SARA to cover tenants, the budget would eliminate funding for Section 542 vouchers. As it did last year, it makes no provisions for renters currently relying on these vouchers, explaining without details that “between the set of current recipients whose income would not allow them to re-qualify, the value of the voucher diminishing over time, and natural attrition from the program, very few of the current recipients will be affected. For the remaining few, options would include vacancies at other USDA properties with rental assistance, applying for HUD funded housing assistance or other similar programs at the state and local level.”

Other Information

USDA’s document explaining its Rural Development budget to Congress provides some additional information:

  • the department’s request includes funding for a contract with a consultant to help implement the Build America, Buy America Act;
  • a breakdown of staffing by state shows that Rural Development had the equivalent of 4,409 full-time staff in FY24 and 4,452 in FY25, and is expected to have 3,057 in both FY26 and FY27. It does not indicate whether the figures are calculated at the beginning of the fiscal year or at the end.

The Rural Housing Service budget explanation includes information about how the housing programs’ funds were used in FY24 and FY25.

Next Steps

This budget represents the first step in a lengthier process to set appropriations for FY27. Both the House and the Senate will develop their own appropriations bills, which may or may not resemble the President’s proposal. The House and Senate should resolve any differences between their bills and send final versions to the President for signature by September 30. If they do not meet that deadline, a continuing resolution would be needed to keep the government running.

For ongoing news on appropriations and other topics related to rural housing, subscribe to HAC emails, which include the free biweekly HAC News.

 

Policy News town

Over 200 Groups Sign on to Support the RHS Reform Act in Congressional Housing Package Negotiations

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Congress is currently negotiating a broad package of housing supply reforms. The Rural Housing Service Reform Act (S. 1260/H.R. 4957) is one of the provisions under consideration for inclusion. This bill is the result of years of significant bipartisan consensus-building and represents a critical opportunity to modernize the U.S. Department of Agriculture’s Rural Housing Service programs. HAC led a sign-on letter to Congress supporting the inclusion of the RHS Reform Act in any final housing package, with more than 200 national and local groups joining to show their support. Thanks to everyone who signed for your partnership!
RHS Reform Act Sign on April 2026 Final
Policy News town

HAC Comments Support USDA Housing Research

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In February, USDA requested comments on opportunities, challenges, and emerging areas in statistical data, analysis, and research produced by some of its offices, including the Economic Research Service (ERS). The department said the information it collects will help inform USDA as it considers future program direction, new initiatives, and potential funding opportunities.

HAC submitted a response to USDA emphasizing the following points, focusing on ERS because its work covers rural housing and community development.

  • ERS is an immensely valuable institution and resource for rural America.
  • USDA should invest more in housing data and research.
  • ERS should expand its relationship with Rural Development and specifically the Rural Housing Service to provide increased and better data on housing resources the agency administers.
  • USDA should provide more publicly available data to help inform strategies to address the “maturing mortgage crisis” within the Section 515 Rural Rental Housing Loan Program – especially data on why properties left the portfolio.
  • Data on properties and residents that are leaving the USDA Section 515 rental stock is vital to preservation efforts.
  • More detailed data on the ownership structure of USDA Section 515 properties would enhance production and preservation efforts for this key housing resource.
  • The Housing Assistance Council increasingly utilizes sub-county data for analyses when available.
  • ERS should continue its research and provide data on philanthropic investments to rural America.
  • USDA should coordinate with the Department of Labor and other federal agencies and institutions to develop much-needed data resources that inform an understanding of how agricultural workers obtain and access housing.
  • USDA should report Section 502 Direct Loan activity to the Consumer Financial Protection Bureau and the Federal Financial Institutions Examination Council through the Home Mortgage Disclosure Act.
  • USDA should work with HUD and the Census Bureau to put “rural” back into the American Housing Survey.

HAC CEO Responds to FY 2027 Budget Proposal

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On Friday, April 3rd, the White House released its full Fiscal Year (FY) 2027 Budget Proposal. While there are a few improvements over FY 2026 for housing affordability programs, the Housing Assistance Council (HAC) is gravely concerned about the number of programs that are slated for underfunding or elimination.

“The FY 2027 budget includes positive steps, such as restored support for USDA’s Section 502 Direct program,” said David Lipsetz, President & CEO of the Housing Assistance Council. “We welcome support for low-income homeownership during an affordability crisis. However, the proposal falls short of what is needed by failing to preserve the nation’s aging stock of rural rental housing and eliminating proven initiatives.”

At the U.S. Department of Agriculture (USDA), funding for both USDA’s Section 515 Rural Rental Housing and its Multifamily Preservation and Revitalization programs would remain at FY 2026 levels, but the budget fails to provide returns on investment or asset management fees for nonprofit and public agency owners.  Additionally, although the budget continues to support Stand‑Alone Rental Assistance to protect tenants when USDA mortgages mature, it proposes eliminating Section 542 vouchers without clearly addressing the impact on current households currently in the voucher program.

If enacted, the Administration’s budget proposal would be particularly damaging to people experiencing homelessness and unaffordable housing by eliminating a number of Department of Housing and Urban Development (HUD) programs that have a proven track record when it comes to serving Americans. The proposal eliminates the HOME Investment Partnerships Program, the Community Development Block Grant (CDBG), the Continuum of Care Program, the Housing Opportunities for Persons with AIDS (HOPWA) Program, Native American programs and Native Hawaiian Housing Block Grants, and fair housing activities.

HAC commends the Administration’s focus on rural-serving Community Development Financial Institutions (CDFIs) in its Treasury Department funding proposal. But our organization recognizes we live in a deeply interconnected nation. We have argued that if rural areas are left behind, the whole nation suffers. The opposite is true also; thus we cannot condone the Administration’s dramatic funding reduction and consolidation of the current CDFI grant programs into a single Rural Community Development Fund.

Perhaps most concerning, the proposal severely cuts funding for capacity building and technical assistance for rural communities. More than anywhere in America, small towns and rural places can struggle to maintain the expertise needed to succeed in the complex world of housing and community development. The budget calls for eliminating Rural Capacity Building at HUD and both the Rural Community Development Initiative and Preservation Technical Assistance at USDA. Such cuts to technical assistance and capacity building programs will prevent community organizations from getting new housing projects off the ground, while also limiting the critical resources they need to complete ongoing projects.

HAC urges Congress to strengthen the FY 2027 budget by restoring technical assistance for rural housing preservation, ensuring rental assistance transitions do not leave tenants behind, fully funding all programs at HUD, and providing nonprofit owners with the tools they need to sustain affordable housing over the long term. In addition, HAC also urges Congress to continue the efforts begun in the Fiscal Year 2026 appropriations bill by specifically adding language to compel the Administration to spend appropriated funding. Read HAC’s full analysis of the Administration’s Fiscal Year 2027 budget proposal for USDA and for HUD.

PRT, HAC, HOPE Release Opportunity Zone 2.0 Recommendations

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The Housing Assistance Council (HAC) in collaboration with Partners for Rural Transformation (PRT) and Hope Credit Union/Hope Enterprise Corporation/Hope Policy Institute (HOPE) Wednesday released recommendations for the Opportunity Zone 2.0 designations to drive investments into rural communities facing persistent poverty.

PRT President Farah Ahmad said: “Opportunity Zones hold tremendous potential to drive investment into rural communities facing persistent poverty across the country – if they are done correctly. This guide offers a framework for state policymakers and local practitioners to ensure that this once-in-a-decade opportunity is not missed in the rural communities millions of people call home.”

HAC President and CEO David Lipsetz said: “Investment in persistently poor rural places is an essential step to address our nation’s affordable housing crisis. State officials have an important opening this year to identify the right places for this investment. This guide explains what’s at stake and how they can take action.”

HOPE Senior Advisor for Policy and Advocacy Diane Standaert said: “With this upcoming round of Opportunity Zone selections, states have a once-in-decade chance to get it right for rural places. HOPE’s experience demonstrates how it’s possible to align community-driven solutions, private investors, and public policy to drive transformative change in rural communities, including those experiencing persistent poverty. With advance planning as recommended in this guide, states can ensure they do not overlook solutions for economic opportunity in the rural areas that need it most.”

Created by the Tax Cuts and Jobs Act of 2017, Opportunity Zones spur economic growth and job creation in low-income communities while providing tax benefits to investors. The first round of Opportunity Zones generated $120 billion in new investments across the country. However, only a fraction of that, about $6 billion, flowed into rural communities by 2022, and even less reached areas experiencing persistent poverty.

The program was amended in the One Big Beautiful Bill Act (OBBBA) and added new incentives for rural communities, including a 30% step-up in basis points for investments and a 50% threshold for showing substantial improvement to rehabilitation projects. However, an overly broad definition of “rural” risks funding being diverted away from targeted rural and Native communities. For example, Atlantic City meets the definition of a “rural Opportunity Zone” under the OBBBA.

Activating Rural Investments in the Next Round of Opportunity Zones: Recommendations for States  can be found here. The recommendations follow four guidelines:

  • Engage Rural Communities, Native Communities, and Practitioners: Hearing directly from rural communities through organizations like Community Development Financial Institutions and non-profit developers will help state and local leaders designate Opportunity Zones that will have the greatest impact.
  • Create a Map that Targets Unique Rural Needs and Development Goals: Mapping tools can assist state and local leaders in designating rural areas where investment is needed most and illuminate the opportunities to leverage additional investment incentives.
  • Create Priorities in State Funding Programs: States can take a more active role in driving investment into rural communities facing persistent poverty by prioritizing projects within preexisting state programs to attract additional resources and investors.  
  • Create an Assessment Tool: Establishing a clear decision-making rubric can ensure high-impact selections are made in a transparent manner.

PRT, HAC, and HOPE hosted a webinar on the guide for state policymakers, regional development hubs, and local non-profits on March 12. The recording is available here.   

Policy News town

HAC Opposes HUD Proposal to Eliminate Disparate Impact Fair Housing Rules

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The Department of Housing and Urban Development has proposed to change its Fair Housing Act regulations. The revisions would eliminate HUD’s rules on disparate impact — the legal concept that conduct is discriminatory if it has inequitable effects, even if there was no intent to discriminate. HAC does not support the proposed change and strongly urges HUD to retain and enforce its current rule. HAC argues that:

  • “Housing affordability and fair housing connect through the principle of ‘disparate impact.’”
  • Rural borrowers more often receive loans with more costly terms and rural residents are disproportionately members of protected classes.
  • Court decisions have not invalidated disparate impact liability.
  • HUD has an explicit statutory responsibility to ensure equal opportunity and freedom from discrimination.
HAC Disparate Impact Comments 2026 Final

HUD Funding Finally Set for FY26

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UPDATE, February 4, 2026 – After a brief partial government shutdown over the weekend, on February 3 the House passed the Senate-approved fiscal year 2026 appropriations bill covering several federal agencies, including HUD, and the president signed the measure into law.

UPDATE, January 23, 2026 – On January 22 the House passed the fiscal year 2026 funding bill that covers HUD. The Senate is expected to approve it during the week of January 26. The White House has said President Trump will sign it.

January 22, 2026 – Text has been released for final funding bills that cover most of the agencies operating under a continuing resolution through January 30, including HUD. House and Senate appropriators agreed to keep many HUD programs at the dollar levels they received in FY24 and FY25. Details are shown in the table below. Homeless assistance grants, Section 202 elderly housing, Section 811 housing for persons with disabilities, and housing for persons with AIDS all receive increases. The measure includes enough funding to renew Emergency Housing Vouchers created during the Covid pandemic. In addition, the bill extends the National Flood Insurance Program through September 30, 2026.

— Information about FY26 funding for the U.S. Department of Agriculture’s rural housing programs is available here. —

HOME, Community Development Block Grants, Native American housing, fair housing, and housing counseling are funded at the same levels as in FY25.

The Self-Help Homeownership Opportunity Program (SHOP) remains at its recent $12 million level. The Rural Capacity Building program increases from $6 million in FY25 to $7 million this year.

The bill protects Continuum of Care operations while litigation continues regarding program changes HUD proposed. It directs HUD to provide one-year non-competitive renewals of CoC grants that expire in the first quarter of calendar year 2026 and then to continue the same process for each quarter in which it does not make new funding awards.

The bill’s provisions also instruct HUD to change some of its 2025 processes. For example, it requires 60-day comment periods for regulatory proposals.

The House is expected to pass the bill on January 22. The Senate should approve it during the week of January 26. The White House has said President Trump will sign it.

Table: HUD Funding Levels

 

Program ($ in millions) FY23 Final FY24 Final FY25 Final FY26 Budget FY26 House, H.R. 4552 FY26 Senate, S. 2465 FY26 Final, H.R. 7148
CDBG $3,300 $3,300 $3,300 0 $3,300 $3,100 $3,300
HOME 1,500 1,250 1,250 0 0 1,250 1,250
PRICE Manuf. Hsg. Prsrv. 225 10 10 0 0 10 0
Self-Help Hmownrshp (SHOP) 13.5 12 12 0 9 13 12
Veterans Home Rehab 1 0 0 NA 0 0 0
Rural Cap’y Bldg (RCB) 6 6 6 0 5 8 7
Tenant-Based Rental Asst. 27,600 32,387 32,387 0 35,268 37,355 38,439
     VASH 50 15 15 0 15 15 15
Project-Based Rental Asst. 13,938 16,010 16,010 0 17,127 17,804 18,143
Public Hsg. Capital Fund 3,200 3,410 3,410 0 2,286 3,200 3,200
Public Hsg. Operating Fund 5,109 5,501 5,501 0 5,000 5,087 5,024
202 Hsg. for Elderly 1,075 913 913 0 950 972 1,031
811 Hsg. for Disabled 360 208 208 0 262 265 287
State Rental Assistance Program Total for the programs to be combined in the SRAP: 58,429 31,787 NA NA NA
Native Amer. Hsg. 1,020 1,344 1,344 877 1,344 1,354 1,354
Native Hawaiian 22.3 22.3 22.3 18.3 22.3 22.3
Tribal VASH 7.5 7.5 7.5 10 10 10 10
Homeless Asst. Grants 3,633 4,051 4,051 4,024 4,158 4,530 4,417
Hsg. Oppties for Persons w/ AIDS (HOPWA) 499 505 505 505 529 529
Fair Hsg. 86 86.4 86.4 26.4 28.5 86.4 86.4
Healthy Homes & Lead Control 410 345 345 0 296 296 296
Hsg. Counseling 57.5 57.5 57.5 0 0 57.5 57.5

NA: Not Available

HUD Funding Bills Approved by Committees in House and Senate

August 1, 2025: The Appropriations Committees in both houses of Congress have passed fiscal year 2026 funding bills for the Department of Housing and Urban Development (combined with funding for the Department of Transportation). The full House and Senate have not yet considered these bills. If they do not resolve differences between their proposals for HUD and other parts of the government before FY26 begins on October 1, they will need to adopt a continuing resolution to keep the government open with funding continuing at this year’s levels.

Details of the funding levels in both bills are shown in the table above.

The House Appropriations Committee passed its bill, H.R. 4552, on July 17, with deep cuts in some HUD programs. It does not adopt the administration’s proposal to combine numerous programs into a block grant to states, but does include some of the significant cuts proposed in the administration’s budget: it would provide no funding for HOME or housing counseling, would reduce SHOP from $12 million this year to $9 million, and would drop fair housing from $86.4 million to $29.5 million. It would hold CDBG and Native American programs at current levels. It would also decrease HUD staffing by 26%.

The Senate Appropriations Committee passed its bill, S. 2465, on July 24.  In contrast to the House bill, the Senate would provide $1.25 billion for the HOME program. The Senate bill would also increase funding above this year’s levels for housing vouchers, project-based rental assistance, homeless assistance grants, Section 202 elderly housing, and Section 811 housing for people with disabilities. SHOP would be set at $13 million, up from $12 million in FY25, and the Rural Capacity Building program would receive $8 million. The bill would provide $3.1 billion for CDBG compared to this year’s $3.3 billion.

Neither the House nor the Senate would renew expiring Emergency Housing Program vouchers. The Center on Budget and Policy Priorities provides state-by-state and demographic estimates of the loss of Housing Choice Vouchers under the House and Senate Transportation-HUD proposals.

More Details Released on Administration’s Proposed HUD Funding

On May 30, 2025, the White House released more details on its fiscal year 2026 budget request. Adding to the information in the “skinny budget” from May 2, this version provides numbers for individual programs. Fiscal year 2026 begins on October 1, 2025.

Reductions to HUD Programs

HUD’s HOME and Community Development Block Grant programs would be zeroed out, along with the competitive programs that serve Native Americans, the Native Hawaiian Block Grant program, HUD’s self-sufficiency programs, and the Pathways to Removing Obstacles (PRO) Housing program. The Fair Housing Initiatives Program, which funds work by nonprofit fair housing organizations, would be defunded as well, though the Fair Housing Assistance Program would continue to support work by state and local governments.

Several other HUD programs – Tenant-Based Rental Assistance, Project-Based Rental Assistance, Public Housing, Section 202 elderly housing, and Section 811 housing for people with disabilities – would be combined into a block grant to states with reduced funding. Rental assistance would be limited to two years for able-bodied adults and a majority of it would be required to go to elders and people with disabilities.

The skinny budget indicated that “short- and medium-term housing assistance … to homeless and at-risk individuals” would also be capped at two years.

The Continuum of Care, Housing Opportunities for Persons with AIDS, Emergency Solutions Grants, and other homeless assistance programs would be merged into an “expanded” Emergency Solutions Grant program, which would fund state and local governments.

The budget proposes to defund HUD’s Rural Capacity Building program.

HUD’s Section 4 capacity building program, which serves both rural and urban places, would support only Habitat for Humanity under the budget. For years, Section 4 has also enabled Enterprise Community Partners and the Local Initiatives Support Corporation to assist community organizations.

HUD’s Congressional Justifications document, which explains the budget request to members of Congress, reports that FY25 appropriations can support 8,597 full-time HUD staff, while the proposed FY26 levels would provide 6,340 full-time staff, a 26 percent reduction. It is not clear whether the stated FY25 staffing levels take into account some or all of the layoffs that have been attempted in calendar year 2025.

A New CDFI Program for Rural Communities

The budget proposes a new $100 million Rural Financial Assistance Program at the Treasury Department. Community Development Financial Institutions receiving these funds would be required to use 60 percent of their awards for rural areas, with a priority to investments and loans in places with poverty rates of at least 20 percent. At least 10 percent of total program funds would be targeted to persistent poverty counties, where poverty rates have been at or above 20 percent for 30 years or more.

Although rural-serving CDFIs would benefit from the new program, the budget would eliminate funding for the existing CDFI assistance programs, including the Native CDFI programs. The skinny budget stated that “the CDFI industry has matured beyond the need for ‘seed’ money and should at this point be financially self-sustaining.” The CDFI Fund recently indicated that only Congress could eliminate any of its programs: in a response to an executive order, the Fund stated that all of its programs are required by statute.

Disaster relief through FEMA, the Small Business Administration, and USDA would be reduced. The Low-Income Home Energy Assistance Program (LIHEAP) and the Community Services Block Grant would terminate.

The U.S. Interagency Council on Homelessness would be eliminated, as would NeighborWorks USA (referenced by its official name, the Neighborhood Reinvestment Corporation). The Appalachian Regional Commission would continue, with lower funding, but other regional commissions would end.

Next Steps

This budget represents the first step in a lengthier process to set appropriations for FY26. Both the House and the Senate will develop their own appropriations bills, which may or may not resemble the President’s proposal. The House and Senate should resolve any differences between their bills and send final versions to the President for signature by September 30. If they do not meet that deadline, a continuing resolution would be needed to keep the government running.

The House Appropriations Committee has scheduled its subcommittee markup of the HUD appropriations bill for July 14, with full committee consideration on July 17. The Senate Appropriations Committee has not released a schedule as of June 3.

The budget reconciliation bill to set future spending and tax levels is a separate process, though it could have an impact on FY26 appropriations if Congress agrees on a bill.

For ongoing news on both appropriations and reconciliation, subscribe to HAC emails, which include the free biweekly HAC News.

 

 

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