Policy Update: Deep Proposed Cuts Threaten Housing Programs

by | Jul 15, 2025 | Advocacy Alerts, Advocacy Updates, Organization Updates, Public Education & Organizing

In the aftermath of the reconciliation bill, which was signed into law on July 4—and which includes deep, harmful cuts to health care, food assistance, and more to pay for tax cuts for the most affluent in our society—Congress has turned its attention to creating next year’s federal budget.

Housing Action is alarmed by harsh cuts to critical housing programs in both proposed budgets from the White House and the House Republicans.

Appropriations vs. reconciliation—what’s the difference?

House Republicans Propose Harmful Cuts to HUD in FY26 Budget

On July 13, the House Committee on Appropriations released their draft FY26 Transportation, Housing and Urban Development (THUD) spending bill. The proposal from House Republicans would fund HUD at $67.8 billion—$939 million less than the $74.6 billion allocated in FY25.

While the cuts are not are not as severe as those proposed by the Trump administration, they still include deeply unjust spending reductions:

  • A $773 million decrease for the Housing Choice Voucher program overall and level funding—$32.14 billion—for voucher renewals. Because the cost of rent increases each year, flat funding acts as a cut to rental assistance programs.
  • Inadequate funding to ensure the continuation of Emergency Housing Vouchers (EHVs) for all those currently using them. Created in 2021, nearly 60,000 households nationwide currently rely on an EHV to keep a roof over their heads, including more than 1,800 in Illinois.
  • $5 billion for public housing operating costs, a decrease of $501 million, making it harder for Public Housing Authorities around the country to serve the nation’s 807,000 households living in public housing, which include 1.6 million people.
  • $2.28 billion to public housing capital needs, a decrease of $1.12 billion, despite that the backlog of neeed maintainence and and repair projects is several multitiudes larger than current funding.
  • A 66% decrease for fair housing programs, including enforcement. This is in line with other actions by the Trump adminstration to make housing discrimination easier and weaken the federal government’s affirmative duty to help ensure everyone has equal housing opportunities.
  • Totally eliminating funding for HUD-Approved housing counseling agencies, which assist people with a wide range of housing needs, including becoming a first-time homeowner, avoiding foreclosure, improving credit scores and financial wellness and how to identify a rental property owner who will lease a home to you.
  • Totally eliminating funding for the HOME Program, a key funding source for Low Income Housing Tax Credit developments, but also to create and preserve a variety of other affordable housing to rent or to own.
  • Reducing HUD staff by 26%, consistent with reductions already implemented by HUD Secretary Scott Turner.

The House budget does include some budget increases and rejects some of the most troubling White House policy proposals. For example, the House bill does not include the Trump administration’s proposal to consolidate Homeless Assistance Grants and the HOPWA (Housing Opportunities for People with AIDS program) into the Emergency Solutions Grant program while also zeroing-out HOPWA funding.

Instead, the House bill would provide $4.158 billion in funding for Homeless Assistance Grants, a $107 million increase from the $4.05 billion provided in the final FY25 bill, and will continue funding HOPWA as a separate program at $505 million.

However, this level of funding for Homeless Assistance Grants is not enough funding to renew all existing projects, and the proposed budget does nothing to create the new resources needed to address increasing homelessness.

At the July 14 hearing on the THUD budget, House Democrats, including Representative Mike Quigley (IL-5th), strongly opposed the proposal. Representative Quigley expressed support for continued funding of HOPWA and opposed proposed cuts, including a 7% overall reduction for rental and homelessness assistance.

Even more troubling, the bill includes language that would give the Trump administration broad authority to waive or create alternatives to key requirements for rental assistance and public housing. This could pave the way to changing income definitions, rent calculation formulas, and eligibility rules—opening the door to time limits, work requirements, and higher rent burdens for low-income families.

The Senate is expected to release its own HUD funding proposal soon, and negotiations over the federal budget will continue through September or possibly beyond.

Find out more from the National Low Income Housing Coalition’s full analysis of the House budget proposal and their budget chart.

Housing Action Illinois is in close contact with staff for Senator Richard Durbin, who is a member of the THUD Appropriations Subcommittee in the Senate. We are communicating regularly about how we can work together to oppose harmful cuts to programs that create affordable housing and end homelessness.

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Keep watch for future advocacy alerts and updates from us in the coming weeks, so that you can support our efforts to oppose cuts and harmful policies.

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