The Office of Management and Budget (OMB) has sent President Trump’s FY 2026 Discretionary Budget Request to Congress. In a letter to Sen. Susan Collins, Chair of the Committee on Appropriations for the United States Senate, OMB Director Russell T. Vought writes, “The recommended funding levels result from a rigorous, line-by-line review of FY 2025 spending, which was found to be laden with spending contrary to the needs of ordinary working Americans and tilted toward funding niche non-governmental organizations and institutions of higher education committed to radical gender and climate ideologies antithetical to the American way of life.”
Among the cuts, reductions, and consolidations found in the review is a reduction of nearly $33 billion in funds to the U.S. Department of Housing and Urban Development (HUD), nearly $27 billion in State Rental Assistance Block Grants alone.
According to the budget, “The Budget empowers states by transforming the current federal dysfunctional rental assistance programs into a state-based formula grant which would allow states to design their own rental assistance programs based on their unique needs and preferences. The Budget would also newly institute a two-year cap on rental assistance for able bodied adults, and would ensure a majority of rental assistance funding through States would go to the elderly and disabled. A state-based formula program would also lead to significant terminations of federal regulations. In combination with efforts related to opening up federal lands, this model would incentivize states and the private sector to provide affordable housing. This proposal would encourage states to provide funding to share in the responsibility to ensure that similar levels of recipients can benefit from the block grant.”
The budget mentions the recently established partnership between HUD and the U.S. Department of the Interior (DOI) on a Joint Task Force on Federal Land for Housing to identify underutilized federal lands suitable for residential development, streamlining land transfer processes, and promoting policies that increase the availability of affordable housing.
“President Trump’s proposed 2026 housing budget will drive up homelessness and force apartment owners and operators out of business,” commented David M. Dworkin, President and CEO of the National Housing Conference (NHC). “The budget proposal cuts nearly 44% from the Department of Housing and Urban Development–gutting critical housing and homelessness programs and eliminating highly successful and bipartisan programs like HOME and Family Self-Sufficiency. Further, the budget calls for the elimination of NeighborWorks America–a highly effective organization that serves the housing needs of communities throughout the United States, especially in underserved rural areas in red states. These proposed reductions would have a devastating impact on millions of Americans, particularly the most vulnerable among us, and would directly lead to increased homelessness across the country and the bankruptcy of many private businesses that own and operate affordable housing.”
Among HUD’s Major Cutbacks
National Housing Law Project (NHLP) Executive Director Shamus Roller released the following statement in response to the FY 2026 Budget: “All Americans, across race, place, and party, value the freedom to make a good living, care for our families, and live in a stable home. President Trump’s proposed budget cuts life-saving programs that keep poor and working people housed, fed, and healthy. This comes on top of three months of unlawful attacks by Trump and Elon Musk on the basic infrastructure of our government. Congress must do its job, ignore Trump’s budget proposal, and return to governing. That starts with a fully funded budget that protects us all from harm and prevents evictions of the most vulnerable families. Our country’s budget must serve all of us and not just the billionaires.”
In addition to slashing HUD’s State Rental Assistance Block Grant program, the FY 2026 Discretionary Budget Request will focuses on a number of major HUD programs:
- Community Development Block Grant (CDBG) Program: The Budget proposes to eliminate the CDBG program, which provides formula grants to more than 1,200 state and local governments for a wide range of community and economic development activities. Cutting the CDBG program will save an estimated $3.3 billion according to the Budget Request.
- HOME Investment Partnerships Program: The Budget seeks to eliminate the HOME program, a formula grant that provides state and local governments with funding to expand the supply of housing. Cutting the HOME program will save an estimated $1.25 billion annually.
- Native American Programs and Native Hawaiian Housing Block Grant: The FY 2026 Budget streamlines housing assistance for Native American programs and focusing available resources on the main formula grant to Tribes. Consistent with similar FY Budget proposals eliminating housing programs, the Native Hawaiian Housing Block Grant would be eliminating, saving approximately $480 million annually.
- Homeless Assistance Program Consolidations: The FY 2026 Budget consolidates the Continuum of Care and Housing Opportunities for Persons with AIDS programs into a more targeted Emergency Solutions Grant (ESG) program that provides short- and medium-term housing assistance, capped at two years, to homeless and at-risk individuals. Approximately $532 million would be saved by consolidating these homeless assistance programs.
- Surplus Lead Hazard Reduction and Healthy Homes Funding: This set of programs has unobligated balances that should be depleted prior to receiving further appropriations, and would save approximately $296 million annually if cuts are approved.
- HUD Self-Sufficiency Programs: HUD’s “Self-Sufficiency Programs” were designed to promote self-sufficiency among housing assistance recipients. Cutting these programs would save $196 million annually.
- Pathways to Removing Obstacles (PRO) Housing: Consistent with the Executive Order 14151, “Ending Radical and Wasteful Government DEI Programs and Preferencing,” the FY 2026 Budget proposes to eliminate PRO Housing, which was used by the Biden administration to advance equity through affordable housing development programs. Cutting PRO Housing from the FY 2026 Budget would save an approximate $100 million annually.
- Fair Housing Grants: The Budget looks to save $60 million annually through the elimination of the Fair Housing Initiatives Program (FHIP), which provides competitive grants to public and private fair housing organizations to advocate against single-family neighborhoods and promote radical equity policies. The Budget also seeks to eliminate the National Fair Housing Training Academy, which provides training for Fair Housing Assistance Program (FHAP) and FHIP professionals as well as funding to translate HUD materials to languages other than English.
“President Trump’s bold budget proposes a reimagining of how the federal government addresses affordable housing and community development,” said HUD Secretary Scott Turner of the FY 2026 Discretionary Budget. “It rightfully provides states and localities greater flexibility while thoughtfully consolidating, streamlining, and simplifying existing programs to serve the American people at the highest standard. It creates the opportunity for greater partnership and collaboration across levels of government by requiring states and localities to have skin in the game and carefully consider how their policies hinder or advance goals of self-sufficiency and economic prosperity. Importantly, it furthers our mission-minded approach at HUD of taking inventory of our programs and processes to address the size and scope of the federal government, which has become too bloated and bureaucratic to efficiently function. I look forward to continuing budgetary conversations in the months ahead as we get our fiscal house in order and maximize HUD’s budget for the rural, tribal, and urban communities we are called to serve.”
Click here for more on President Trump’s FY 2026 Discretionary Budget.
