By Kim Johnson and Renee Williams, NLIHC
Note: Given the fast-changing nature of the legislative process, some information may be outdated by the time of publication.
Funding for HUD Programs
Final Fiscal Year 2026 Appropriations Bill and Outlook for Fiscal Year 2027
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 (FY), 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.
In February 2026, Congress passed and the president signed into law a final FY2026 spending bill (https://tr.ee/0IVlmy) for federal programs. Thanks to the work of advocates across the country, the bill included $77.3 billion for HUD, an over $7.2 billion increase from the previous year. This is significantly more than the $3.3 billion increase for HUD programs provided in the Senate’s FY26 spending bill; the House FY26 bill proposed cutting HUD programs by $2.2 billion.
The funding levels provided in the final FY26 HUD spending bill are expected to be sufficient to cover the cost of existing Tenant-Based Rental Assistance (TBRA) and Project-Based Rental Assistance (PBRA) contracts. The final spending bill also increases funding for HUD’s Continuum of Care (CoC) program and creates a timeline for HUD to release CoC funding. However, the spending bill cuts funding for public housing operations and capital needs, despite continued need for critical health and safety repairs to public housing stock.
Outlook for Fiscal Year 2027
President Donald Trump released a budget request for FY27 on April 3. The president’s budget request is a usual part of the appropriations cycle, signaling the start of funding negotiations for the new fiscal year. The budget request is a tool for the White House to message its priorities; only Congress has the power to provide funding for federal programs.
The president’s FY27 budget request includes some of the same proposals and cuts to federal programs outlined in the FY26 request, including zeroing out funding for programs that help with affordable housing construction and community development. The budget request would also make significant changes to HUD’s CoC program, moving funding away from long-term solutions like permanent housing and supportive services and toward less effective, more costly policies like emergency shelters and transitional housing. The request also proposes imposing work requirements and time limits on households receiving HUD assistance. However, it does not include the drastic cuts and dramatic changes to HUD rental assistance programs included in last year’s budget request. Learn more about the FY27 budget request here (https://tr.ee/wVGCGI).
With the president’s budget request released, the House and Senate will next draft their own spending proposals for the coming fiscal year. The House Appropriations Committee is expected to release their FY27 proposal for HUD funding in May; a potential timeline for the release of the Senate Appropriations Committee’s FY27 spending bills has not yet been released.
Congress Considering Bipartisan Housing Supply Bill
The House and Senate are currently considering a bipartisan housing supply bill, the “21st Century ROAD to Housing Act” (S.Amdt.4308/ H.R.6644) (https://tr.ee/1qvAFg and https://tr.ee/fbVcI9). If enacted, the bill would be the largest bipartisan housing supply bill passed by Congress in decades. The bill would make needed reforms to HUD programs and provide incentives to communities to help remove barriers to affordable housing construction.
The bill includes several priorities for NLIHC, including the “Reforming Disaster Recovery Act” (RDRA), which would permanently authorize HUD’s long-term disaster recovery program and make needed updates for more efficient and equitable delivery of disaster recovery funds. The bill also includes the “Rural Housing Service Reform Act,” which would help preserve affordable housing for over 400,000 low-income families living in rural areas, and provisions from the “Choice in Affordable Housing Act” that would help streamline the Housing Choice Voucher (HCV) inspection process, helping families utilize their voucher more quickly.
While NLIHC supports the “21st Century ROAD to Housing Act,” the bill also includes two provisions that raise concerns. First, the bill includes language authorizing another 25 public housing agencies (PHAs) to participate in the Moving to Work (MTW) cohort. PHAs that are part of the MTW Demonstration are allowed to implement certain experimental policies, if approved by HUD. The provision would explicitly prohibit PHAs in the new MTW cohort from imposing work requirements, time limits, or significantly increased rents. Second, the bill would lift the cap on the Rental Assistance Demonstration (RAD) program. While RAD allows access to much needed financing to preserve the properties, NLIHC has opposed RAD expansion over concerns about enforcing tenant protections at properties that have converted through RAD. The bill codifies some tenant protections under RAD; NLIHC will continue working with Congress to strengthen these provisions and ensure tenant rights are protected and our priorities are included in any final bill.
HUD Proposed Rules
Recently, HUD has issued several proposals that NLIHC strongly opposes because, if enacted, these changes would have negative impacts on HUD tenants. The public comment periods on these proposals just finished. Importantly, none of these proposals are final yet. Now, HUD must evaluate the comments it received, write its final version of these changes, and publish them.
“Mixed-status” proposal
HUD’s proposed Mixed-Status rule would require families with mixed immigration statuses (mixed-status families) in certain HUD programs to choose between remaining together and losing their housing assistance. These changes would affect major HUD programs such as public housing, Housing Choice Vouchers, and project-based rental assistance, among others.
If finalized, the changes would not just affect mixed-status families. Mixed-status families pay more in rent on average because they get less assistance, as ineligible family members do not receive rental assistance. Without more money from Congress, fewer families will be served by HUD. Furthermore, HUD also wants to impose stricter documentation and verification requirements that will impact HUD tenants and applicants broadly, including US citizens.
30-day notice for nonpayment proposal. On February 26, HUD took steps to repeal the requirement that public housing agencies (PHAs) and project-based rental assistance (PBRA) owners provide households with a 30-day termination notice prior to filing an eviction action for nonpayment of rent. If finalized, these changes mean that certain tenants in HUD-assisted housing will have less time to catch up on rent to avoid eviction. Note that any changes will not affect the Housing Choice Voucher program or Project Based Vouchers, as they were not covered by the regulation that is being repealed.
Work requirements and time limits proposal
HUD has proposed allowing public housing agencies (PHAs) and HUD-assisted owners to impose work requirements and time limits on assisted families. Under HUD’s proposal, PHAs and Project-Based Rental Assistance (PBRA) owners would be allowed to adopt work requirements for “work-eligible” adults of up to 40 hours per week. “Work-eligible” adults are defined as individuals ages 18 to 61 who are not people with disabilities, pregnant, or enrolled in higher education. The “work-eligible” definition also excludes primary caretakers for: a person with a disability, a child under six, or a person who is temporarily incapacitated. Time limits on assistance would also be allowed after two years for “non-elderly, non-disabled families.” The proposed changes, if finalized as written, would apply to the following programs: public housing, Housing Choice Vouchers (HCV), Project-Based Vouchers (PBV), and PBRA.
Note that HUD’s proposal would not require housing providers to adopt time limits or work requirements. However, the proposal tries to provide a path for states to pass laws that would, for example, require PHAs within those states to impose work requirements and/or time limits.
As noted above, at this stage, these proposals have not been finalized. NLIHC will continue to monitor the progress of each proposal.