White House’s FY27 Budget Proposes Deep Cuts to Affordable Housing
Today, the White House released its Fiscal Year (FY) 2027 budget request, proposing $1.5 trillion for defense alongside a 10 percent cut to non-defense discretionary spending compared to FY26 enacted levels. Appropriations Committees in the House and Senate will use it as a starting point as they formulate their own funding bills, and Cabinet officials will begin meeting with Appropriators in the coming weeks.
The topline numbers: $1.5 trillion for defense (a 44 percent increase) and a 10 percent cut to non-defense discretionary spending versus FY26 enacted. HUD comes in at $73.5 billion, well below the FY26 enacted level of $84.2 billion, but far above the President’s own FY26 request of $43.5 billion. That gap is driven by the most significant policy shift in the FY27 HUD budget request: unlike last year, the Administration is not proposing to block grant Section 8 and other assisted housing programs orhere dismantle public housing. That is a meaningful departure from the President’s FY26 budget request.
Beyond rental assistance, the budget proposes to eliminate or sharply reduce many other housing and community development programs. CDBG, HOME, PRO Housing, the Low Income Home Energy Assistance Program (LIHEAP), Housing Counseling, NeighborWorks America, and the U.S. Interagency Council on Homelessness are all proposed for elimination or phase-out. The CDFI Fund is not eliminated outright, but its core grant programs would be replaced by a narrower rural-focused program funded at a 63 percent reduction from FY26 enacted levels. Congress has maintained funding for each of these programs in prior years, and the FY26 enacted levels remain the relevant baseline for appropriators this cycle.
“The President’s FY27 budget features similar cuts and eliminations proposed in the President’s FY26 budget that Congress restored on a bipartisan basis just months ago,” said Sarah Brundage, NAAHL President and CEO. “These programs have broad support, and our members see their impact every day in communities across the country. NAAHL will be making that case directly to House and Senate Appropriators in the weeks ahead.”
A recent report from NAAHL and the Center for Affordable Housing Lending detailed the critical role that federal funds play in building and maintaining affordable housing.
A comparative table of enacted and proposed funding levels is available here. Program details follow.
CDFI Fund
FY26 Enacted: $324 million
The budget proposes $119.5 million — a 63 percent cut from the FY26 enacted level of $324 million. The traditional CDFI Program, Bank Enterprise Award Program, Small Dollar Loan Program, Healthy Foods Financing Initiative, and AmeriCorps CDFI Economic Mobility Corps program are all eliminated. What remains is a $100 million Rural Financial Assistance Program requiring that at least 60 percent of each recipient’s lending go to rural areas, plus $19.5 million to administer CDFI Fund programs. No new Bond Guarantee Program authority is requested, a departure from last year’s request.
HUD
FY26 Enacted: $84.2 billion
$73.5 billion requested — $10.7 billion (13 percent) below FY26 enacted, but $30 billion above the President’s own FY26 request. The most consequential difference from the President’s request last year: Section 8, public housing, and other assisted housing are not proposed for block granting or consolidation. Each is maintained as a unique federal program, with modest changes.
Maintained or modestly increased
Tenant-Based Rental Assistance (Housing Choice Vouchers): $38.8 billion — up from the FY26 enacted level of $38.4 billion. This would fund renewals for approximately 2.4 million families and includes $30 million for the Melania Trump Foster Youth to Independence Initiative.
Public Housing Fund: $8.622 billion ($5.377 billion operating + $3.2 billion capital) — up from an FY26 enacted level of $8.2 billion.
Cut
Project-Based Rental Assistance (PBRA): $17.6 billion (including $400 million advance appropriation) — down roughly $900 million, or 5 percent, from the FY26 enacted level. This would fund renewals for approximately 1.2 million households under about 17,500 contracts. Unlike the FY26 proposal, PBRA remains a federal program and is not proposed to be block granted.
Section 202 Housing for the Elderly: $959 million — down $72 million (7 percent) from FY26 enacted $1.031 billion. Section 202 remains a unique federal program and is not proposed to be block granted.
Section 811 Housing for Persons with Disabilities: $266 million — down $21 million (7 percent) from FY26 enacted $287 million. Section 811 remains a unique federal program and is not proposed to be block granted.
Native American Programs: $887 million — down from approximately the $1.35 billion FY26 enacted level. Competitive grants are proposed to be eliminated; Indian CDBG is reduced to $5 million for emergency/imminent threat uses only.
Fair Housing: $26 million — down from FY26 enacted $86 million, a 70 percent cut. Funds FHAP only (state and local enforcement agencies).
SHOP: $16 million — provided in a single grant for both the Self-help Homeownership Opportunity Program and Section 4 activities available only to Habitat for Humanity, down from FY26 enacted level of $65 million. Of the $16 million, $5 million must be for rural capacity building.
Zeroed out
CDBG: $0 vs. FY26 enacted level of $3.3 billion.
HOME: $0 vs. FY26 enacted level of $1.25 billion.
PRO Housing: $0 vs. FY26 enacted level of $50 million. The budget proposal also rescinds $100 million in unobligated PRO Housing balances.
Continuum of Care: replaced by a formula-based $4.024 billion Emergency Solutions Grant program. This would be a net reduction of $393 million from FY26 enacted homeless assistance levels.
HOPWA: $0 vs. FY26 enacted level of $529 million.
Choice Neighborhoods: $0 vs. FY26 enacted level of $25 million.
Self-Sufficiency Programs (FSS, Jobs-Plus, ROSS): $0 vs. FY26 enacted level of about $206 million.
Native Hawaiian Housing Block Grant: $0 vs. FY26 enacted level of $22 million.
Housing Counseling: $0 vs. FY26 enacted level of $58 million.
Federal Financing Bank Risk Sharing: projecting zero activity in FY27, which could signal no new commitments and a winding down of the program
New
Program Integrity Initiative: $30 million for fraud, waste, and abuse enforcement across federal housing programs.
USDA
FY26 Enacted: approximately $25.7 billion
$20.8 billion requested — $4.9 billion (19 percent) below FY26 enacted funding levels. Within the Rural Housing Service, the President’s budget proposes to eliminate the Rural Housing Voucher program while increasing funding for Section 521 Rental Assistance. It would also reduce funding for Section 502 Single-Family Direct Loans.
Maintained or modestly increased
Section 504 Home Repair Loans: $25 million in loan guarantee authority — level with the funding provided in FY26.
Section 515 Rental Housing Loans: $50 million — level with the funding provided in FY26.
Section 521 Rental Assistance: $1.795 billion — slightly above the $1.715 billion provided in FY26.
Section 538 Multifamily Guaranteed Loans: $500 million in loan guarantee authority — an increase over the $400 million in loan guarantees provided in FY26.
Multifamily Preservation and Revitalization Demonstration: $30 million — level with FY26 enacted funding.
Cut
Section 502 Direct Loans: $983,168,000 vs. $1 billion in loan authority provided in FY26.
Section 502 Guaranteed Loans: $20 million vs. $25 million in loan guarantee authority provided in FY26.
Rural Housing Assistance Grants: $26 million vs. $27 million in FY26 enacted funding for these home repair grants.
Zeroed Out
Section 542 Rural Housing Vouchers: $0 vs. $48 million FY26 enacted level.
HHS
FY26 Enacted: approximately $126.9 billion
$111.1 billion requested — $15.8 billion (12.5 percent) below FY26 enacted levels. Both the LIHEAP and CSBG are again proposed for elimination:
LIHEAP: $0 vs. FY26 enacted funding of approximately $4 billion.
CSBG: $0 vs. FY26 enacted funding of approximately $775 million.
Other Agencies
NeighborWorks America: $15 million vs. the FY26 enacted level of $158 million. The President’s Budget once again proposed to eliminate the agency, with all funding provided intended to wind down the agency.
U.S. Interagency Council on Homelessness (USICH): $200,000 vs. the FY26 enacted level of $3 million. The President’s budget proposes to eliminate USICH, with all funding provided to wind down the agency.
What’s Next
The President’s budget proposal is just the first step in the government funding process. The House and Senate Appropriations Committees will now begin their work to craft bills that must ultimately be enacted to fund federal programs. NAAHL will continue to engage with Congress and the Administration about the vital importance of these housing and community development programs to boost our housing supply and expand economic opportunity.