FY 2026 Effect on HOUSING and HOMELESSNESS

 

Out Of The Frying Pan and Into The Fire

 

The importance of providing housing for the homeless has been emphasized by 

researchers, government (federal, state, city), homeless organizations, and nonprofit 

groups for decades. Housing has become the signature approach to ending or reducing 

homelessness. Yet, the recent FY 2026 proposed budget bill cuts housing support for the homeless.

 

   On May 2, the Republican members of Congress proposed cuts that would affect  affordable housing, homelessness, and community development. Over 10 million Americans rely on HUD rental assistance, the vast majority of whom are seniors, people with disabilities, and children. The cuts will put even more individuals at risk of homelessness. 

 

I  have selected a series of articles written about housing and the homeless for readers  to understand the impact of housing cuts on homelessness.

 

EFFECTS:

 

Reduced Funding for Homelessness Assistance Program:                                                    

www.nlihc.org  www.nahro.org  www.endhomelessness.org 

• Homeless Assistance Grants – 12% cut
• Fewer resources needed to find stable housing
• Consolidation of programs would restrict the flexibility of how funding can be used and potentially reduce the amount of available support to individuals and families.

 

Impact on Affordable Housing:

 

• Significant cuts to tenant-based rental assistance, public housing, and other assistance programs.
• Results in fewer households receiving rental assistance, leading to increased   housing instability and a greater risk of homelessness.
• Cuts would eliminate CDBG and HOME improvement partnership programs.

Challenges for Local Organizations:

• More money would be given to states and less to nonprofits.
• State allocations would lead to ineffectiveness and targeted services.

 

Impact on Specific Programs:    

        

• Funding cuts for the Youth Demonstration Program and Homeless Data Analysis Project.                                               
• Limitations on the ability to use HAG funding for permanent housing and supportive services.

   

Department of Housing and Urban Development HUD Housing Cuts:                                      

Abraham, R. www.shelterforce.org               

• Technical assistance for nonprofits, tribes and housing authorities
• Technical assistance for consultants to help smaller organizations or  governments build affordable housing, prevent homelessness or efficiently implement federally funded programs
• Community Compass grants provide technical assistance to grantees, public housing authorities, and tribes for their work in areas including disaster recovery, affordable housing development, rapid rehousing, permanent supportive housing and housing voucher programs.
• Help organizations implement Continuum of Care grants, the $3.6 billion in federal homelessness dollars that HUD has been slow in disbursing this year. Eight contractors out of 34 (as of FY 20) that provide technical assistance under Community Compass saw their awards cut: Enterprise Community Partners, LISC, Cloudburst Consulting, Corporation for Supportive Housing, BCT Partners, Homebase, Collaborative Solutions, and Technical Assistance Collaborative. These firms, which include both housing nonprofits and private consultancies, provide technical assistance to hundreds of nonprofits across the country.   

Driven HUD Cuts Will Make It Harder for People to Afford Housing, Exit Homelessness March 11, 2025

FACTS:

• Cutting Housing and Urban Development (HUD) staff, withholding urgently needed funds, and making harmful policy changes.
• In 2023, 24 million people lived in low-income households that paid over half their income in rent, forcing them to shift money away from other basic needs and often leaving them one setback away from eviction. 50 percent of staff in the HUD office that administers vouchers, public housing, and Native American housing programs, which together help 7 million people afford housing;

• 44 percent in the office the oversees the project-based rental assistance program, which provides rental assistance to an additional 2 million people;
• 84 percent in the office that administers homelessness assistance and grants that help communities build affordable housing and recover from disasters; and
• 77 percent in the office that enforces fair housing laws — one of a series of Administration actions that will severely weaken protections for people who face housing discrimination based on characteristics such as race, gender, and age.
• Meanwhile, HUD has yet to deliver any of the $3.6 billion in homelessness assistance funding awarded January 17, which communities are counting on to provide rental assistance, shelter, outreach, and other services to people experiencing homelessness. While HUD notified at least some grantees that they will begin to receive funds soon, the uncertainty has disrupted community planning efforts and the final awards may include abrupt policy changes that could complicate implementation. The Administration has also canceled contracts for organizations that help protect people from housing discrimination and provide technical assistance that plays a crucial role in effectively implementing HUD programs — even though the Administration provided no evidence that the organizations were failing to perform as required.
• Finally, HUD officials have proposed or discussed a series of policy changes that would make it harder for many people in need to receive housing assistance. HUD officials have also called for evicting or cutting off rental assistance for people who don’t meet burdensome work requirements, a step that would increase administrative costs and expose many children, people with serious health conditions or caretaking responsibilities, and others to severe hardship.

HOMELESSNESS RESOURCES U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Competitive Homeless Programs Website:                    

Rather than squandering resources on costly tax cuts for the wealthy, people goals of ending homelessness and ensuring everyone has a stable, affordable home. And they should make targeted reforms to address shortcomings of those programs to make them even more effective at addressing pressing housing needs. The Administration’s actions will have the opposite effect, making it harder for people to afford housing and exit homelessness. 

EFFECTS of CUTS: 

U.S. Homelessness Jumps to Another Record High, Amid Affordable Housing Shortage : NPR   

• The federal office that funds housing and other support for homeless people across the country is slated to shrink dramatically, a prospect that advocates warn would make record-high homelessness even worse. The Office ofCommunity Planning and Development, within the Department of Housing and Urban Development, is slated to lose 84% of its staff, according to a document seen by NPR. That target is the deepest of any office in the agency.”That proposed cut is massive. And the potential for adverse impact at the community level and at the national level is also massive,” said Ann Oliva, who spent a decade at HUD and is now CEO at the National Alliance to End : Homelessness. 
• (CoC) funds local networks of organizations to quickly rehouse homeless individuals and to minimize the trauma and dislocation caused to individuals, families, and communities by homelessness. Emergency Solutions Grants Program (ESG) funds are distributed by formula to metropolitan cities, urban counties, territories, and states for street outreach, emergency shelter, homelessness prevention, rapid re-housing assistance, and homeless management information systems. 
• The HUD-Veterans Affairs Supportive Housing Program (HUD-VASH) is a joint program between HUD and the U.S. Department of Veterans Affairs (VA). HUD provides housing choice vouchers and VA provides case management and outreach. This program targets veterans who are currently homeless. 
• The Title V Program – Federal Surplus Property for Use to Assist the Homeless Enables eligible organizations to use unutilized, underutilized, excess, or surplus 
• Federal properties as facilities that assist homeless persons. 

Trump Administration Plans Mass Firing at Office That Funds Homelessness Programs:

NPR’s Jennifer Ludden can be contacted through encrypted communications on Signal at Ludden., February 22, 2025.

• Overall, Trump’s Department of Government Efficiency, an entity known as DOGE and overseen by Elon Musk, plans to reduce HUD’s staffing by about half.
• The Community Planning and Development office at HUD disburses more than $3.6 billion in federal funding for rental assistance, mental health and substance use treatment, and outreach to try and get those living outside into shelter or   housing. It’s the “backbone” of local communities’ response to homelessness,   Oliva said, “in blue states and red states alike.”

• Cutting so much staff would mean firing not only people at headquarters in Washington, D.C., but also those in field offices around the country, she said. And that means it would likely take longer to get funding to the thousands of local nonprofits who provide housing and other support.

Trump Administration’s “Skinny” Budget Request Foreshadows Massive Cuts, Changes to HUD Programs – Take Action! nlihc.org, May 05, 2025.

• President Donald Trump released a “skinny” budget request on May 2 indicating the Administration will pursue cuts that would decimate HUD’s vital affordable  housing, homelessness, and community development funding in its full fiscal year 2026 (FY26) spending request expected later this month. In total, the “skinny” request foreshadows a full request that will aim to slash HUD spending by 44% from FY25, including a proposal that would result in an unprecedented 43% cut to HUD’s rental assistance programs. For additional details, read NLIHC’s analysis. 
• Every year, the Administration submits a budget request to Congress in advance of the annual appropriations process. Only Congress has the power to provide funding for federal programs, so the president’s budget request does not carry any legal weight, but it does provide an opportunity for the Administration to signal their priorities in the fiscal year ahead. During his first term, President Trump repeatedly called for massive spending cuts to HUD programs, including deep cuts to the Housing Choice Voucher (HCV) program that, if enacted, would have taken housing assistance away from 200,000 households who rely on their HCV to keep a roof over their heads. The previous Trump Administration also pushed Congress to enact policies that would increase barriers to accessing housing assistance, including work requirements, time limits, and minimum rent increases on HUD-assisted households. However, thanks to advocates and congressional champions who worked tirelessly to protect HCVs and other vital HUD programs, these proposed cuts and policy changes were never enacted.  
• The “skinny” budget request makes clear these threats will be raised again as FY26 negotiations take shape. The president’s full budget request is expected to be released later in May and will provide additional details of the White House’s recommendation for FY26 spending. Senate Appropriations Chair Susan Collins (R-ME) and Vice-Chair Patty Murray (D-WA) issued statements expressing concern over the cuts proposed in the request.  
• “Based on my initial review, I have serious objections to the proposed freeze in our defense funding…and to the proposed funding cuts to – and in some cases elimination of – programs like [the Low Income Heating and Energy Assistance Program],” said Chair Collins. “Ultimately, it is Congress that holds the power of the purse.” 
• “This is a proposal to raise costs and make life harder—and worse—for working people in every part of the country,” said Vice-Chair Murray. “Among other things, President Trump’s preliminary fiscal year 2026 budget request eviscerates [HUD], with a 43.6% cut. [It] slashes HUD rental assistance programs by 42.8% while foisting responsibility over those programs onto state and local governments. Over 10 million Americans rely on HUD rental assistance, the vast majority of whom are seniors, people with disabilities, and children. This will rip the roofs off Americans’ heads and put even more families at risk of homelessness.”  
• House Appropriations Committee Ranking Member Rosa DeLauro (D-CT) expressed similar concerns over the proposal, noting in a statement that the budget request will make the cost-of-living crisis worse by “attacking education, housing, cancer research, and investments in the middle class.” 
• Over the coming weeks, members of the President’s Cabinet – including HUD Secretary Scott Turner – will appear before the House and Senate Appropriations Committee to discuss and justify the President’s budget proposal. Secretary Turner’s hearing has yet to be scheduled.  

In addition to the need for increased funding in FY26 to cover the cost of HCV renewals, Congress will need to provide funding to ensure the 60,000 households who receive an Emergency Housing Voucher (EHV) do not lose their assistance. The EHV program was created in the “American Rescue Plan Act of 2021,” which provided $5 billion for 60,000 new tenant-based rental assistance vouchers specifically targeted to people experiencing or at immediate risk of homelessness, including people escaping intimate partner violence. The EHV program mandates that public housing authorities (PHAs), which are responsible for administering the program, work with their local Continuums of Care (CoCs) to identify people and families at risk of or experiencing homelessness and connect them to an EHV, plus wrap-around services when needed for long-term housing stability.  

The EHV program has been extremely successful, helping almost 60,000 people and families – and in particular families with children – find and maintain stable housing. While funding for the program was originally slated to last until 2030, the rapid increase in the cost of rent over the last four years has caused funding to run out much more quickly than expected. Unless additional funding is allocated by Congress, HUD estimates that funding for the program will likely run out in 2026.