The Path Forward for the FY 26 THUD Appropriations Bill

January 27, 2026 — Funding for Homeland Security has become a critical flashpoint in the Senate as it tries to pass appropriations bills ahead of the January 30 expiration of the current Continuing Resolution (CR). In response to tragic events in Minneapolis this weekend, Senate Democrats have pledged to reject the $1.33 trillion dollar spending package that includes Transportation-HUD if Homeland Security funding remains in the package. Republicans are hoping to pass the package by the end of the week and have been in discussions with Democrats on potential paths forward, though it is unclear what the path forward looks like.  

• Last week, the House passed and sent the final FY 26 minibus package to the Senate before leaving DC for their recess this week.
• The package contained a variety of bills including Homeland Security, Defense, Labor-Health Human Services-Education, Transportation-HUD, and Financial Services.
• Passing the remaining FY 26 appropriations bills (including THUD) will require 60 votes in the Senate, which, as of last week, seemed possible. However, due to the shooting in Minneapolis this weekend, Democrats are now saying they won’t vote for the package if it includes funding for Homeland Security. Democrats helped pass the last two CRs to keep the government open.
• Further, there are a few Republican Senators that typically do not vote for full year legislation that could withhold their votes. This could make Democrat support for the bill more vital.
• If the Senate makes any changes to the package, including stripping the bill of funding for Homeland Security — a possibility that Senate Republicans hope to avoid — the House will have to hold a new vote on the changes, restarting the process.
• The House is out of session this week, so the new vote would happen likely after Jan. 30, fueling concern over a temporary shutdown.
• It is unclear if the House would have the votes to pass a new Homeland Security funding bill, something that is top of mind for Senate Republicans. 
• There are also procedural hurdles in the Senate that could further slow the process.  

Act Now! Tell Your Senators to Pass the Bipartisan FY 26 THUD Bill 

The bipartisan FY 26 THUD budget has been negotiated and is ready for the Senate to pass! Visit NAHRO’s Action Alert Center to send our latest advocacy letter to your Senators urging them to pass the bipartisan FY 26 THUD bill by January 30^th to help housers. Anyone can send a letter, so share this with your networks and encourage them to also reach out to their Senators at this crucial moment for housers and the families we serve!  

NAHRO THUD Analysis and Next Steps

Our team is tracking developments over the larger FY 26 package and will update NAHRO members as they dive further into the bill. NAHRO’s In-Depth coverage will be released once we have better information on how the Senate plans to address Democrat concerns over Homeland Security funding in the broader FY 26 funding package. NAHRO will also help members prepare for a government shutdown if it looks as though we are heading that direction later this week.

What to Expect if There Is a Shutdown

HUD has pre-loaded funding for PHAs for their Housing Assistance Payments (HAP), Administrative Fees, and Operating Fund. Regular HAP and Admin. Fees have been made through March, and Operating Fund should be available through April 2026. FY 2025 Capital Fund amounts have been obligated. HUD was scheduled to release FY 2025 Operating Fund Shortfall amounts mid-Spring of 2026 — the shutdown may slow down this process. 

HUD is working on the ninth round of CY 2025 shortfall funding, which is tied to HUD’s budget reconciliation and is needed to prepare for CY 2026 funding, once approved by Congress. Because full VMS reconciliation is required, the process is slower and largely focused on data clean-up. HUD anticipates being able to bring staff in during a shutdown to complete the reconciliation and release this ninth round of shortfall payments. 

All other grants that have not been processed will be delayed during the shutdown. 

If there is a shutdown, NAHRO will continue to provide resources on our shutdown resource page. 

Housing Update From Washington

Join the NAHRO team for our next Housing Update from Washington this Thursday at 1:30 PM EST. If Congress appears headed for a government shutdown this week, our update will focus on shutdown preparedness. If the Senate is able to resolve concerns with DHS funding in the appropriations bills, we’ll focus on the HUD funding levels in the bills. 

NAHRO on the Hill

The New Democrat Coalition, a group of 115 center-left House Democrats invited NAHRO to participate in a Housing Affordability Roundtable discussion. Eric Oberdorfer, Director of Policy and Legislative Affairs at NAHRO, shared NAHRO’s positions with lawmakers as supply side issues, reducing red tape, and expanding affordability were on the minds of lawmakers. NAHRO discussed how to make it easier to develop affordable housing, including exempting housing and community development programs from Build America, Buy American requirements.

Panelists included:

• Lake Coulson, Senior Vice President and Chief Lobbyist, National Association of Home Builders
• Owen Caine, Assistant Vice President of Federal Legislative Affairs, National Apartment Association
• Michael Mini, Executive Vice President, Chicagoland Apartment Association
• Mike Kingsella, Chief Executive Officer, Up for Growth
• Andrew Justus, Housing Analyst, Niskanen Center
• Sharon Wilson Géno, President, National Multifamily Housing Council
• Britt Van, Senior Policy Director, National Housing Conference
• Kim Johnson, Senior Director of Policy, National Low Income Housing Coalition
• Eric Oberdorfer, Director of Policy and Legislative Affairs, NAHRO

HUD Oversight Hearing with Secretary Scott Turner

The House Financial Services Committee (Authorizing Committee), hosted Secretary Turner for a full committee hearing as part of their oversight responsibilities for HUD. Lawmakers on both sides asked the Secretary questions about his full year on the job. This was the Secretary’s first appearance before this committee and may be one of the last times we hear from him before he returns to the Hill to explain the administration’s FY 27 budget. The FY 27 budget process typically begins once the White House sends its budget proposal to Congress ahead of the State of the Union. President Trump’s first State of the Union of his second term is scheduled for February 24.