by Kim Johnson
Funding for HUD Programs
Update on Fiscal Year 2025 Appropriations
The annual appropriations process is an essential task completed by Congress every year to ensure the federal government and all its vital programs – including affordable housing and homelessness programs – continue to operate. Congress is tasked with enacting a new budget by October 1, which marks the beginning of the new federal fiscal year, but it rarely meets this deadline. Instead, Congress typically enacts a short-term continuing resolution (CR), which briefly extends funding for the federal government at its current level, to extend the deadline and buy more time to finalize a spending bill for the new fiscal year.
The most recent budget process for fiscal year (FY) 2025 was delayed by almost six months and resulted in Congress passing a year-long CR to extend funding for the federal government at its current level across federal programs until October 1, 2025, when FY 2026 begins.
Long-term CRs create funding problems for affordable housing, homelessness, and community development programs. Because the cost of housing increases every year, increased funding is required every year to maintain the number of households served by vital federal programs. Congress provided some programs, including HUD’s Housing Choice Voucher (HCV) program, with additional funding to mitigate the harm that would be caused by flat funding. However, even the additional funding is insufficient to meet the need for housing assistance.
The final FY25 spending bill underfunds HUD’s vital programs, including their Homeless Assistance Grants program by $150-200 million, and HUD’s Housing Choice Voucher (HCV) program. As a result of this underfunding, the HCV program is expected to lose an estimated 32,000 vouchers through “attrition” – when a household no longer needs their voucher, the voucher will become invalid instead of being reissued to another family in need because there is not sufficient funding for the voucher to continue serving a new family.
Outlook for Fiscal Year 2026
The yearly appropriations process officially begins when the president releases a budget request for the coming fiscal year. The budget request is not a legal or binding document; rather, it is a way for the Administration to signal their priorities in the coming year. President Trump released a “skinny” version of his budget request for FY 2026 on May 2, with full details expected later in May.
The “skinny” request proposes an historic 44% cut to HUD funding from the previous year, including an overall 43% cut to HUD’s vital rental assistance programs. In addition to spending cuts, it also calls for redesigning rental and homelessness assistance programs, combining rental assistance programs into a “State Rental Assistance Block Grant” and “consolidating” homelessness assistance programs and the Housing Opportunities for People with AIDS (HOPWA) program under the Emergency Solutions Grants (ESG) program. Consolidating and turning these programs into block grants will make it easier to slash programs’ funding, and more difficult for states to meet the affordable housing, homelessness, and rental assistance needs of people and communities.
During his first term, President Trump recommended huge cuts to HUD in his yearly budget request, ranging from 12-18% decreases in funding from the previous fiscal year. These cuts would have resulted in over 200,000 households losing the assistance they rely on to keep a roof over their heads, but thanks to the hard work of advocates and members of Congress championing HUD’s vital programs, these cuts were never enacted.
When we fight for our homes, neighbors, and communities, we win. At a time when more households than ever are experiencing housing insecurity, and more people and families are being pushed into homelessness, it is more important than ever for us to show up and demand Congress fight to expand – not cut – vital investments in affordable housing and homelessness programs.
Threats to Medicaid and SNAP Funding
Congressional Republicans are trying to use a legislative process known as “budget reconciliation” to pass a massive bill that would spend over $5 trillion to extend tax cuts primarily benefiting the wealthy and corporations and provide additional funding for immigration enforcement and detention. The bill would also enact at least $1.5 trillion in spending cuts, primarily targeted to Medicaid, the Supplemental Nutrition Assistance Program (SNAP; formerly the Food Stamp Program), and investments provided in the Inflation Reduction Act of 2022.
Budget reconciliation is a special legislative process that allows a bill to pass the Senate with a simple majority of 51 votes, rather than the 60 votes typically required in the chamber. With Republicans in control of the House, Senate, and White House, they can use reconciliation to pass a bill without any bipartisan input or support. However, the kinds of policies that can be included in a reconciliation bill are also limited, and funding for HUD’s vital affordable housing and homelessness assistance programs is largely safe from being targeted for spending cuts in a reconciliation bill.
However, Medicaid and SNAP both provide vital assistance to the same people served by HUD programs. Medicaid provides affordable healthcare to over 72 million low-income people around the country, while SNAP helps over 42 million low-income people afford the cost of groceries. Medicaid can also be used to cover health-related social costs, including housing and supportive services required to maintain long term housing stability.
In the weeks ahead, Republicans in the House and Senate will draft and release the legislative text of their bills. Already, there has been public opposition to potential cuts to Medicaid and SNAP; as negotiations continue, it will be crucial for advocates, especially those in Republican districts and states, to keep up the pressure on their members of Congress to vote against any reconciliation bill that would cut vital safety net programs.
Administrative Actions Impacting Housing Assistance
Staff Firings at HUD and Other Federal Agencies
Since taking office, the Trump Administration has worked to dismantle the federal government through massive layoffs across federal agencies, including HUD. The Administration created a special commission, the Department of Government Efficiency (DOGE), headed by billionaire Elon Musk. DOGE and Musk recommended cutting the size of HUD’s workforce in half, starting with HUD’s field offices.
HUD staff play a vital role connecting the department to the communities it serves. HUD staff are responsible for administering grants and providing technical assistance that help people and communities respond to the needs of people experiencing homelessness; build, preserve, and operate affordable housing; afford the cost of market-rate rental housing; investigate fair housing and civil rights complaints; and rebuild housing and infrastructure after major disasters.
HUD and several other federal agencies received a Reduction in Force (RIF) memo in February, giving them until May 18 to develop a plan to terminate employees. So far, an estimated 3,000 employees – around 30% of HUD’s workforce – have accepted the Trump Administration’s voluntary buyout (better known as the
“fork in the road” offer) and left the department, entered early retirement, or have been laid off. DOGE and the White House have eliminated staff at other federal departments and agencies, including the entire office responsible for administering the Low-Income Heating and Energy Assistance Program (LIHEAP) at the Department of Health and Human Services. Recent reports also indicate the Department of Homeland Security is planning to significantly reduce the size and scope of the Federal Emergency Management Agency (FEMA).
Even before the RIF, HUD struggled for years with chronic understaffing; decimating the department’s workforce would severely limit HUD’s ability to process and administer grants and provide technical assistance to individuals and communities.
Attacks on Fair Housing & Equal Access
The Trump Administration has undermined efforts to repair racial and social inequities in housing and placed already marginalized people at greater risk of harassment, discrimination, housing instability, and homelessness. Shortly after taking office, the Trump Administration instructed HUD to stop enforcing its Equal Access Rule, which ensures transgender people experiencing homelessness can obtain shelter in accordance with their gender identity. In February, HUD withdrew its Affirmatively Furthering Fair Housing (AFFH) rule, which provides communities receiving HUD funding with guidance on how to ensure funds are used to undo historic patterns of discrimination. NLIHC is anticipating additional attempts to limit access to HUD housing and assistance, including for households with an immigrant family member, and attempts to add work requirements, time limits, or increased minimum rent requirements to HUD programs.
Note: Given the fast-changing nature of the legislative process, some information may be outdated by the time of publication.