In his budget plan for fiscal year 2026, President Donald Trump has proposed cutting a total of $32.9 billion in funding to HUD. The plan includes a $26.7 billion cut to federal rental aid — approximately 40% of the total — and would essentially end Section 8 and other housing voucher programs, according to NPR.
Instead of providing aid at the federal level, the budget proposes creating a grant program to send rental assistance funds to states. It would terminate many federal regulations, incentivize states and the private sector to provide affordable housing and work in tandem with efforts to open public lands to development.
“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 reads.
In tandem with this program, the Trump administration would impose a two-year limit on rental assistance for adults without disabilities. The budget document states that this would direct a majority of rental assistance to elderly and disabled tenants. The proposed budget does include $25 million in housing grants for youth aging out of foster care.
Other eliminations from HUD include:
- The $3.3 billion Community Development Block Grant program, which provides funds for community and economic development. The Trump administration says that the program is poorly targeted and that the funds have been used for projects for which they were not meant, such as skateboard parks.
- The HOME Investment Partnerships program, which provides funding to state and local governments to expand housing.
- The consolidation of homeless assistance programs into a single program, refocused on short- and medium-term housing assistance capped at two years.
- Pathways to Removing Obstacles Housing and Fair Housing Grants, removed as part of the administration’s effort to end diversity, equity and inclusion programs in the federal government.
“President Trump’s bold budget proposes a reimagining of how the federal government addresses affordable housing and community development,” said HUD Secretary Scott Turner in a statement on the discretionary budget proposal. “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.”
Housing advocates hold a different view. The Washington, D.C.-based housing advocate National Alliance to End Homelessness has urged Congress to reject the budget proposal, and says that the cuts would effectively end funding for 166,000 units of permanent supportive housing for the formerly homeless.
“Between 2023 and 2024, homelessness increased by 18%, yet this proposal would strip funding for [HUD’s] homelessness programs by 12%. That is a recipe for disaster,” said Ann Oliva, CEO of the National Alliance to End Homelessness.
