FY 2026 Budget Proposes Devastating Cuts to Housing and Community Development, Block Granting Rental-Assistance to States
May 2, 2025 — Today, the Trump Administration released their FY 2026 skinny budget proposal. Although the president’s budget is a political document and does not have the force of law, it does propose devastating cuts to housing and community development programs. The budget proposes the creation of a State Rental Assistance Block Grant, which would block grant funding for Public Housing, Section 8 Tenant-Based and Project-Based Rental Assistance, Housing for the Elderly, and Housing for Persons with Disabilities to the states – and cut these programs by an overall $26.718 billion. The budget would also institute a two-year cap on rental assistance for able bodied adults. NAHRO firmly opposes the scope of these cuts and block granting rental assistance to states. These cuts would have a devastating impact on millions of families across the country and block granting funding would make it easier for Congress to cut rental-assistance in the future.
The budget also proposes eliminating the HOME Investment Partnerships (HOME) and Community Development Block Grant (CDBG) programs, which provide critical resources to communities across the country. Eliminating these programs would make it more difficult for communities to provide needed services and increase the supply of affordable housing. Further, the budget would consolidate the Continuum of Care (CoC) program and Housing Opportunities for Persons with AIDS (HOPWA) into a more targeted Emergency Solutions Grant (ESG) program. Funding for individuals would be capped at two years.
Public Housing Agencies (PHAs) are vital to communities nationwide, effectively managing resources to support vulnerable residents and uphold local accountability. They reduce homelessness, stabilize families, create jobs, and lead community development that enhances neighborhood safety and livability. By providing direct rental assistance, PHAs enable low- to middle-income families to afford housing near their workplaces, driving positive economic outcomes in communities of all sizes. The proposals in the President’s budget would have devasting impacts on communities across the country.
Proposed Cuts to Programs:
- Tenant-Based Rental Assistance, Public Housing, Project-Based Rental Assistance, Housing for the Elderly, and Housing for Persons with Disabilities: -$26.718 billion, a 43% cut (remainder of funds to combined and block granted to states with a two-year cap on assistance for able bodied adults). The budget does include $25 million specifically allocated in housing grants for youth aging out of foster care.
- CDBG: – $3.3 billion, eliminating the program.
- HOME Investment Partnerships Program: -$1.25 billion, eliminating the program.
- Homeless Assistance Program Consolidations: -$532 million, a 12% cut (ESG, HOPWA, and CoC grants would be combined into one program).
- Self-Sufficiency Programs: -$196 million, eliminating FSS, Jobs Plus, and ROSS.
Call to Action!
Congress ultimately decides Fiscal Year 2026 funding – the budget proposal is just the beginning of a long appropriations process. Now is the time to contact your members of Congress and share how these harmful cuts would impact your community. Visit our Action Alert Center to send a letter urging support for affordable housing and community development programs, and to showcase the vital work of PHAs and community development organizations.
You can also call your representatives directly. NAHRO has prepared talking points and state-level housing data flyers to help you make your case.
There are many ways to find your members’ phone number.
- You can find your members of Congress here.
- You can also look up your representative here and your Senators here.
- This website also provides an easy way to quickly look up the phone numbers for your Members of Congress. Note: Although the views on the website are not NAHRO’s, it is a useful resource that can help you directly call your members of Congress’ offices.