NAAHL Calls on Congress to Enact Essential Funding for Affordable Housing Supply, Community Development

Earlier this month, Congress passed legislation to reopen the government. That bill provided full fiscal year funding for three of 12 appropriations bills: Agriculture, Military Construction-Veterans Affairs, and Legislative Branch.

The Agriculture bill provided funding for the Rural Housing Service, including a slight increase in 502 Direct Loans to support low-income homebuyers and Section 521 rental assistance, and level funding for home repair loans and single-family and multifamily loan guarantees compared to Fiscal Year (FY) 2025 funding levels. Other programs, including Section 504 home repair grants for very low-income homeowners and direct multifamily loans, saw small funding decreases compared to FY 2025.

All other agencies and programs, including the Department of Housing and Urban Development (HUD) and the CDFI Fund, received funding based on FY 2025 levels through January 30, 2026, giving Congress more time to negotiate funding for these agencies for the rest of FY 2026.

What’s Happening

Appropriations Committees in both the House and the Senate are actively working to advance legislation to fund the nine remaining groups of agencies before January 30. The House and Senate Appropriations Committees have each passed their own Transportation, Housing and Urban Development, and Related Agencies (THUD) bills, and Congressional leaders have indicated that this bill could advance in the next package of funding bills.

The House and Senate THUD bills both provide higher levels of funding for many housing programs that were proposed in the President’s budget request. Between the House and Senate, the Senate bill set higher funding levels for several vital housing programs, including:

• The HOME Investment Partnerships Program, the only block grant program dedicated housing construction and preservation. HOME received $1.25 billion in the Senate bill but was not funded in the House bill.

• PRO Housing grants, which support communities in eliminating barriers to housing supply. The Senate provided $60 million for PRO Housing grants, while the House provided no funding for this program.

• Rental assistance, including project-based rental assistance and vouchers that help support individual renters as well as creation of new affordable housing supply.

NAAHL’s comparison of FY 2025 and proposed FY 2026 funding for key housing and community development programs is available here.

Engage THUD Appropriators Now

As Congress works to pass full-year funding legislation for the remaining federal agencies, NAAHL calls lawmakers to support new affordable housing supply and help bring down housing costs by enacting a THUD funding bill that includes the funding levels provided in the Senate THUD bill.

Now is the time for supporters of housing and community development to remind members of Congress about the importance of funding housing and community development programs in the THUD bill to support affordable housing supply and bring down housing costs.

As you engage with members of Congress, it’s vital to remind them that:

• It is critical that Congress pass adequate funding to support housing and community development programs relied on by urban, suburban, rural, and Tribal communities across the country. These programs are most efficient when they can rely on the certainty that comes with a full year appropriation and not a Continuing Resolution. Please include THUD, at the Senate levels, in an Appropriations package (or “minibus”) as soon as possible.

• Funding staff (included in the annual budget) is essential to the federal housing agency having the capability to implement Congressionally-appropriated dollars. Drastic cuts to funding and staff could put affordable housing – and the families and seniors who depend on it – at risk.

• For stakeholders particularly concerned with proposed changes to COC funding: the THUD bill could protect how HUD dollars continue to finance existing and new permanent supportive housing. Without legislation, proposed changes to homelessness funding could threaten vital affordable housing and leave as many as 170,000 families and individuals without a roof over their heads.

What’s Next for the CDFI Fund?

For already Congressionally-appropriated FY 2025 funding, NAAHL is continuing to monitor the Office of Management and Budget’s delay in releasing the funds needed to support the Capital Magnet Fund (CMF) operations, despite $410 million being available in Treasury accounts. The timing for the FY 2025 CDFI Program and Native American CDFI Assistance Program awards also remain uncertain.

For FY 2026 funding, Congress is still deliberating the FY 2026 Financial Services and General Government (FSGG) bill, which provides funding for the CDFI Fund. In September, the House Appropriations Committee advanced its FSGG bill. The Senate FSGG Subcommittee has not marked up its version of the bill. There is reporting that the Senate Appropriations Committee could release more bills, including the FSGG bill, this week without formal markups. If Congress does not pass a full year appropriation for the FSGG bill or otherwise extend the funding beyond January 30, any agency or program funded by this bill, including the CDFI Fund, would face another shutdown.

NAAHL will continue to provide updates as Congress works to pass FY 2026 funding before the January 30 deadline.