Last week, the White House released the topline fiscal year 2026 (FY26) budget, which outlines significant changes and reductions in various programs, particularly within the U.S. Department of Housing and Urban Development (HUD). As the national leader in supportive housing, we are deeply concerned about the proposed budget, which includes significant cuts to affordable housing and critical community resources.
More than 30 years of data show that extreme cuts to federal housing and service funding at this magnitude would be catastrophic for millions of Americans teetering on the edge of homelessness and would devastate communities.
At a time when the nation is facing record homelessness and severe shortages of affordable housing, the proposed budget:
- Cuts funding to HUD by 45% – a staggering reduction of $33 billion from FY24.
- Eliminates affordable and supportive housing development tools, then restructures and cuts the massive federal rental assistance programs (housing vouchers) by $26.7 billion, compelling states to either fund or drastically reduce these programs. These cuts jeopardize the stability of more than 5 million households nationwide, which would force hundreds of thousands into homelessness and overwhelm emergency shelters.
- Makes significant policy changes to cap housing assistance at two years and “encourage” a 50% match from state and local governments, rewriting and reducing the federal role in this key aspect of the national safety net.
- Merges the Continuum of Care (CoC) grants and Housing Opportunities for Persons with AIDS (HOPWA) into the Emergency Solutions Grants (ESG) program, cutting total spending by $532 million.
- Eliminates key capital tools that create and preserve affordable housing development, including the Community Development Block Grant (CDBG), HOME Investment Partnerships Program, while significantly reducing funding for the Community Development Financial Institutions (CDFI) Fund in the Treasury budget.
The proposed budget also includes cutting over a quarter of funding for health services across multiple departments. This reduction targets critical community-based services that help people access healthcare and mental health support. It will make it harder for individuals to stay economically stable during challenging times. It proposes to eliminate programs that older adults and people with disabilities rely on, including $770 million in reductions for Community Services Block Grants, over a billion in cuts for Substance Abuse and Mental Health Services Administration (SAMHSA) grants, and the Low-Income Home Energy Assistance Program (LIHEAP) by more than $4 billion.
The budget released by the White House is a topline funding request, with more details expected in the coming weeks. Ultimately, Congress is responsible for making budget decisions.
CSH will continue to monitor the developments, share key information and advocacy alerts for the supportive housing field, and work with congressional members to ensure they preserve critical housing and services funding for the communities they represent.
In the coming days, we will share ways you can send advocacy messages to your congressional members. If you want to receive our advocacy alerts, please sign up.
