President Donald Trump’s recommendations on discretionary funding levels for fiscal year 2026 include cutting $33.6 billion in funding for the Department of Housing and Urban Development (HUD), including 43 percent of grant funding for HUD’s rental assistance programs including public housing, Section 8 assistance, housing for the elderly and housing for persons with disabilities.
In a letter from Office of Management and Budget Director Russel Vought to the Senate Committee on Appropriations, Vought detailed the administration’s proposed cuts and said they “considered, for each program, whether the governmental service provided could be provided better by state or local governments (if provided at all).”
The recommendations include cutting $26.72 billion from HUD programs, including Housing Choice Vouchers, Public Housing, Project-Based Rental Assistance, Section 202 Housing for the Elderly, and Section 811 Housing for Persons with Disabilities. Those programs would instead be funded through state rental assistance block grants. The proposed budget would also place a two-year cap on rental assistance for “able-bodied adults.”
According to the proposed budget, “this model would incentivize states and the private sector to provide affordable housing.”
“President Trump’s bold budget proposes a reimagining of how the federal government addresses affordable housing and community development,” HUD Secretary Scott Turner said. “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.”
Other budget recommendations include eliminating HUD’s Community Development Block Grant program, the HOME Investment Partnerships Program, the Fair Housing Initiatives Program, the Indian Housing Block Grant program, the Native Hawaiian Housing Block Grant program and the Family Self-Sufficiency program and cutting Homelessness Assistance Grants by $532 million.
“The proposals outlined in this preliminary request are not only untenable, they are unconscionable,” National Low Income Housing Coalition Interim President and CEO Renee Willis said. “At a time of rapidly rising rents, increasing economic hardship, and a record number of people experiencing homelessness, the administration should be asking Congress to expand – not slash – federal investments in affordable housing and homelessness assistance, and working with Congress and communities to ensure these vital resources are available to every household in need.”