Trump Budget Proposes Cuts to Key Housing, Community Development Programs

On May 2, the Trump administration released its Fiscal Year 2026 "skinny" budget proposal outlining funding recommendations for federal programs. The budget calls for significant cuts to vital housing and community development, including:

• Eliminating funding for Community Development Block Grants (CDBG) and the Pathways to Removing Obstacles to Housing program (PRO Housing)
• Eliminating funding for the HOME program and the Community Development Finance Institutions fund (CDFI)
• Cuts to homelessness assistance
• Converting tenant rental assistance to a state block grant

The budget request would slash U.S. Department of Housing and Urban Development (HUD) spending by nearly half from Fiscal Year 2025 levels.

The president's full budget request will be released later in May with additional details.

Budget vs. Appropriations

The budget is the opening act in an extended process of setting funding levels for the next fiscal year. It is important to note that every year, the administration submits a proposal to Congress in advance of the appropriations process. Congress will now begin hearings and committee action. Only Congress has the power to set funding for federal programs, meaning the president's request is not binding. However, budgets are an opportunity for the administration to indicate its priorities and seek to influence Congress.

The appropriations process will be extremely challenging on Capitol Hill. Some senior Republicans, such as Senate Appropriations Chair Susan Collins (R-ME), have already rejected many of the budget proposals. Still, the budget suggests the administration will press Congress for deep funding cuts. Finding sufficient common ground to produce a bill will be difficult.

Demonstrating the local impact of threatened programs to Congress will be important as this debate unfolds. Tackling the housing crisis and other essential planning priorities needs a reliable and sustainable federal fiscal and policy partner.

Be on the lookout for advocacy opportunities from APA as we encourage all members to ask their Congressional members to support and protect key federal housing programs for FY26.

Top image: Photo by Pete Marovich/The New York Times