Trump Proposes Major Cuts to HUD Funding in 2026 Budget

Washington, D.C. — In his fiscal year 2026 budget proposal, President Donald Trump aims to cut $32.9 billion in funding to the U.S. Department of Housing and Urban Development (HUD). The plan includes a significant reduction of $26.7 billion in federal rental assistance, approximately 40% of the total budget for HUD, as reported by NPR.

Rather than maintaining federal aid, the budget suggests establishing a grant program to transfer rental assistance funds directly to individual states. This would involve terminating many federal regulations and prompting states and private entities to focus on creating affordable housing, while also encouraging public land development.

According to the budget document, “The budget empowers states by transforming the current federal dysfunctional rental assistance programs into a state-based formula grant which would allow states to design their own rental assistance programs based on their unique needs and preferences.” This approach comes alongside a proposed two-year cap on rental assistance for adults without disabilities, directing most aid to elderly and disabled tenants.

The budget does allocate $25 million for housing grants aimed at youth aging out of foster care. HUD Secretary Scott Turner praised the proposal, stating, “President Trump’s bold budget proposes a reimagining of how the federal government addresses affordable housing and community development.” He added that it aims to grant more flexibility to states and localities while simplifying existing programs.

However, housing advocates express grave concerns. Ann Oliva, CEO of the National Alliance to End Homelessness, criticized the proposed cuts, arguing that they would eliminate funding for 166,000 units of permanent supportive housing for the formerly homeless. “Between 2023 and 2024, homelessness increased by 18%, yet this proposal would strip funding for HUD’s homelessness programs by 12%. That is a recipe for disaster,” Oliva stated.