The Trump Administration has released additional supporting materials for its Fiscal Year 2026 (FY26) Budget Request. These new materials, including an appendix from the Office of Management and Budget and “Congressional Justifications” for individual agencies such as the U.S. Departments of Housing and Urban Development (HUD) and Agriculture (USDA), expand on the limited information provided earlier in the so-called “skinny” budget. However, much information still has not been released, including descriptions of tax proposals and potential housing finance reform ideas. Overall, the changes proposed in the FY26 budget envision a dramatic reduction in federal support for affordable housing and a major restructuring of how the remaining federal assistance is delivered.

HUD Program Funding

The budget proposes eradicating large swaths of the HUD budget. In total, the budget requests $43.5 billion in discretionary budget authority for HUD in FY26, as compared to $89.1 billion in FY25, representing a 51 percent decrease year over year. This reduction is attributable to the consolidation of various rental assistance and public housing programs into a single State Rental Assistance Program formula block grant and the elimination of virtually all funding for existing HUD block grant programs such as the HOME Investment Partnerships and Community Development Block Grant (CDBG) programs, among others, as well as a reduction of more than 2,000 full-time equivalent HUD staff. In particular:

• The budget requests $36.2 billion for a new State Rental Assistance Program, including $4.4 billion in advance appropriations to be available in FY27. This initiative would require Congress to enact new authorizing language to replace all of HUD’s current rental assistance programs, including the Housing Choice Voucher, Public Housing, Project-Based Rental Assistance, Section 202 Housing for the Elderly, and Section 811 Housing for Persons with Disabilities programs. Of note, the sum of discretionary authority for these programs in FY25 was approximately $63 billion as compared to $31.8 billion requested for FY26, with state and local governments presumably expected to make up the difference.
• The budget requests zero funding for the HOME Investment Partnerships Program, compared to $1.25 billion enacted in FY25. The budget argues that “[n]umerous factors and regulatory barriers stifle housing development; many [of which] cannot be solved, and may be worsened, by Federal involvement.” The budget also cites $5.2 billion in undisbursed “HOME” funding, presumably alluding to remaining HOME-ARP funding for which Congress provided an expenditure deadline of September 30, 2030; however, HOME-ARP was a unique, one-time program intended to address narrowly targeted activities and populations and is not a substitute for annual funding for the more broadly applicable HOME program.
• The budget requests zero funding for the CDBG program as compared to $3.4 billion enacted in FY25, arguing “[s]tate and local governments are better positioned to serve their communities’ needs than the Federal Government.” The budget further envisions providing no funding for the CDBG Disaster Recovery program in FY26, as compared to $12 billion provided in FY25 to address natural disasters occurring in 2023 and 2024.
• The budget proposes $4.024 billion for the Emergency Solutions Grants (ESG) program, a reduction of $27 million from the FY25 enacted level, and proposes consolidating all other HUD homelessness assistance, including the Continuum of Care, Permanent Supportive Housing, and Youth Homeless Demonstration programs, under the ESG program.

With respect to HUD’s single-family programs, the budget requests $400 billion in loan authority for the Federal Housing Administration’s Mutual Mortgage Insurance Fund, which supports FHA’s single-family “forward” and home equity conversion mortgage “reverse” mortgages; this is the same level as FY25. The administration also requests $160 million for administrative expenses to support a range of FHA functions, such as loan underwriting, claims processing, and risk monitoring, a $10 million increase from FY25. For FHA’s General Insurance and Special Risk Insurance fund, which finances FHA’s affordable multifamily activity, manufactured housing loans originated through FHA’s Title I program, and health care facility loan insurance programs, the administration asks that authority stay level at $35 billion.

The budget requests $550 billion in commitment authority for FY26 for Ginnie Mae, the same as the FY25 enacted level. The budget also requests $56 million in spending authority from offsetting collections ($197 million) for Ginnie Mae salaries and expenses.

USDA Rural Housing Program Funding

The budget requests $23 billion in discretionary budget authority for the U.S. Department of Agriculture, a decrease of more than 22 percent or $6.7 billion. The administration believes the budget will “improve the efficiency and effectiveness” of USDA’s Rural Development (RD) programs, including its housing programs, and allow RD to “refocus on its core mission.” Below is a summary of proposed funding levels for key RD housing programs for HFAs.

• The Section 502 Single-Family Housing Direct Loan Program would not be funded under the budget, a reduction of $880 million from FY25 enacted funding levels. The budget states that not requesting funding for the Direct Loan Program reflects “the focus and priority” on the Guaranteed Loan Program.
• The loan level for the Section 502 Single-Family Housing Guaranteed Loan Program would be $25 billion, the same as enacted in FY25. Loan authority would be available for two years to facilitate the program’s operation, including during continuing resolutions.
• The Section 515 Multifamily Housing Direct Loan Program would receive $50 million, a decrease of 17 percent from FY25 enacted funding levels.
• The Section 538 Multifamily Housing Guaranteed Loan Program would be funded at $400 million, the same as in FY25.
• The Section 521 Rental Assistance Program would receive nearly $1.72 billion, an increase of seven percent or more than $107 million. This amount would cover renewals of existing rental assistance contracts. The budget also authorizes USDA to continue, for another year, decoupling rental assistance from Section 515/516 properties with expiring mortgages, preserving the affordability of these units.
• The Section 542 Rural Voucher Assistance Program would not be funded under the budget, a reduction of $48 million. The administration believes the decoupling authority will allow USDA to preserve most of its project-based rental assistance, which will decrease the need for tenant-based voucher assistance in the future. It says the majority of current voucher holders “will be able to adjust without the continued assistance, or with alternative local, state and Federal programs.”
• The Rental Preservation Demonstration Program would receive $15 million, a decrease of $19 million or 56 percent, from FY25 enacted funding levels.

For additional information, refer to NCSHA’s May 2 blog, Trump Administration Releases “Skinny” FY26 Budget Proposal.