FY26 House THUD Appropriations Bill: Summary of Housing Funding Changes and Rescissions

FY26 House THUD Appropriations Bill: Summary of Housing Funding Changes and Rescissions

On Monday, July 14, the House Appropriations Transportation, Housing and Urban Development, and Related Agencies (THUD) Subcommittee marked up its FY26 funding bill. The Subcommittee voted 9-7, along party lines, to advance the bill to the full Appropriations Committee without amendment.

The House bill does not eliminate nor reduce funding for many HUD programs as significantly as proposed in the President’s Budget request, underscoring the importance of ongoing Congressional advocacy for key housing and community development programs. However, the House bill does reduce HUD funding to $67.751 billion, $939 million less than the FY25 enacted level. The House bill also eliminates several critical programs including the HOME program, the only state and local grant program dedicated to affordable housing for low-income households and one that often pairs with the Low-Income Housing Tax Credit. 

The House Appropriations Committee will vote on advancing the THUD bill to the full House on Thursday, July 17. The Senate has not yet released the text of its THUD bill. In prior years, the Senate’s THUD bill differed from the House version and retained funding for programs that the House bill would eliminate. The chambers will need to reconcile and pass 12 funding bills before the end of the fiscal year on September 30, 2025, in order to avoid a government shutdown.

Summary of House THUD Bill

• $3.3 billion for Community Development Block Grant (CDBG) program formula grants, level with FY25 funding.

  o The House bill also includes more than $2.3 billion in Community Project Funding through the Economic Development Initiatives (EDI) program. This is funding for specific projects enumerated within the bill. Projects sponsored by nonprofits are not eligible for EDI funding.

  o The President’s Budget proposed eliminating CDBG funding.

• $1.1 billion for Native American Housing Block Grant, level with FY25 enacted funding.

  o The President’s budget requested $872 million.

• $28.5 million for Fair Housing, $58 million (-67%) below FY25 enacted levels.

  o The President’s budget requested $26 million for the Fair Housing Assistance Program (FHAP) while eliminating funding for the Fair Housing Initiatives Program (FHIP), the Limited English Proficiency Initiative, and the National Fair Housing Training Academy (NFHTA).

• $42 million for Section 4 Capacity Building, level with FY25 enacted funding.

  o The President’s budget included $16 million for Section 4 designated for Habitat for Humanity.

• $1.469 billion for salaries and expenses, reflecting a 26% reduction in staffing at HUD.

The House bill also included funding for HUD’s public housing and rental assistance programs:

• $17.1 billion for Project-Based Rental Assistance (PBRA), $237 million more than the FY25 enacted level and sufficient to fully fund all existing contracts.

• $2.3 billion for the Public Housing Capital Fund, $1.12 billion (-33%) below the FY25 enacted level.

• $5 billion for the Public Housing Operating Fund, $526 million (-10%) below FY25 enacted level.

• $35.3 billion for Tenant-Based Rental Assistance (TBRA), $780 million below the FY25 enacted level.

• $950 million for Section 202 Housing for the Elderly, $19 million (+2%) more than the FY25 enacted level.

• $261 million for Section 811 Housing for Persons with Disabilities, $5 million (+2%) more than the FY25 enacted level.

The President’s Budget had proposed to eliminate funding for each of the individual programs and consolidate them into a single state block grant program; the House bill does not adopt the proposal.

While the House bill includes funding for a number of HUD programs, it would eliminate funding for several key programs, as proposed in the President’s budget request, including:

• The HOME Investment Partnerships Program. The program received $1.3 billion in FY25.

• Choice Neighborhoods. The program received $75 million in FY25.

• PRO Housing Grants. The grants were funded at $100 million in FY25.

• The PRICE Program. The program received $10 million in FY25.

HUD Rescissions and Policy Provisions

In addition to providing program funding, the House THUD bill includes general provisions that make policy changes, including:

• Rescinding any unobligated balances from the Public Housing Fund, the Community Development Fund (which includes CDBG funding), and the Choice Neighborhood Initiative from FY25 HUD appropriations (Sec. 235).

• Rescinding $15 million from the Manufactured Housing Fees Trust Fund (Sec. 235).

• Rescinding $417 million of unobligated balances from the Office of Lead Hazard Control and Healthy Homes (Sec. 235).

• Barring THUD bill funding for local jurisdictions that don’t comply with Department of Homeland Security requests for advance notice before releasing a specific undocumented immigrant from custody (Sec. 236).

• Prohibiting HUD from using any funds to update minimum energy efficiency standards for new housing it finances. This includes updates through the “Adoption of Energy Efficiency Standards for New Construction of HUD- and USDA-Financed Housing” (Sec. 237).

• Prohibiting use of funds to administer or enforce HUD’s rule requiring tenants to be given 30 days’ notice before ending a lease for nonpayment of rent (Sec. 238).

• Allowing the HUD Secretary to give one or more public housing agencies (PHAs) the authority to set their own rules for total tenant payments and housing assistance payments, waiving certain federal requirements, with that authority locked in for 7 years once granted (Sec. 239).

Other Agency Funding

In addition to HUD, the THUD bill also governs funding for other federal agencies related to housing. The House THUD bill:

• Includes $100 million for NeighborWorks, $58 million (-37%) below the FY25 enacted level.

  o The President’s budget provided $27 million to wind down NeighborWorks.

• Eliminates funding for the U.S. Interagency Council on Homelessness (USICH). USICH received $4 million in FY25.

  o The President’s budget also proposed to eliminate USICH.

Click here for the full bill text.

Click here for the House Appropriations Committee’s summary of the bill.