Trump Administration Releases FY27 Budget Proposal

Read NCSHA’s April 7 Preliminary Analysis

The Trump Administration today released its Fiscal Year 2027 Budget Request. The budget outlines the administration’s fiscal priorities for increasing military spending by $1.5 trillion, or 44 percent, and cutting domestic non-defense spending by $73 billion, or 10 percent. The departments of Housing and Urban Development (HUD) and Agriculture (USDA) would receive funding cuts of $10.7 billion (or 13 percent) and $4.9 billion (or 19 percent), respectively, with many affordable housing programs under their authority slated for significant funding reductions or elimination.

HUD Program Funding

The budget requests $73.5 billion in discretionary funding for HUD in FY27, lower than FY25 and FY26 enacted funding levels of $77 billion and $84.2 billion, respectively, but significantly higher than the $43.5 billion the administration requested last year. The budget proposes to eliminate many of the same affordable housing programs that were targeted for elimination in last year’s budget proposal, including the HOME Investment Partnerships Program (HOME) and Community Development Block Grant (CDBG) program.

In particular, the budget calls for eliminating funding for HOME, CDBG, Continuum of Care homeless assistance, Family Self-Sufficiency, Housing Opportunities for Persons with AIDS, Self-Help and Assisted Homeownership, Preservation and Reinvestment Initiative for Community Enhancement, Pathways to Removing Obstacles to Housing, Housing Counseling, Fair Housing activities, and the Department of Health and Human Services-administered Low-Income Home Energy Assistance Program.

Rental Assistance Programs

Unlike last year’s proposal, the budget request does not call for block-granting and significantly cutting funding for federal rental assistance programs including tenant-based and project-based rental assistance. Instead, the budget proposes $38.8 billion for the Housing Choice Voucher program, an increase of $407 million over enacted FY26 funding levels, and $17.6 billion for project-based rental assistance, a $903 million decrease from FY26 enacted levels.

Federal Financing Bank Risk-Sharing

The budget assumes there will be no new Federal Financing Bank financing for Federal Housing Administration (FHA) – HFA multifamily Risk-Sharing loans in FY27 but does not include language saying the administration proposes to end the program. We understand this may come separately later.

Performance-Based Contract Administration

The budget includes a general provision (Section 224) authorizing HUD to select project-based rental assistance contract administrators through a notice of funding opportunity resulting in individual state awards designated as “cooperative agreements” (with an allowance for two awards in California). The provision says eligible applicants will be public housing agencies as defined by section 3(b)(6)(A) of the United States Housing Act of 1937 and nonprofits of such agencies when operating outside of the state or territory in which such agency is established. The language also specifies “the Secretary may select the best qualified applicant regardless of whether it operates within the jurisdiction of the State or territory served.”

Single-Family Programs

The budget requests $160 million in the Mutual Mortgage Insurance Fund program account for administrative expenses to support a range of FHA functions, such as loan underwriting and servicing, claims processing, and risk monitoring. This is the same level requested for FY26. The budget projects insurance of $284 billion for forward mortgages and $15 billion for home equity conversion mortgages, with additional commitment authority available in case these amounts are exceeded during execution.

FHA’s General Insurance and Special Risk Insurance (GI/SRI) programs provide mortgage insurance for a variety of purposes, including financing for the development and rehabilitation of multifamily housing, residential care facilities, and hospitals and for property improvement and manufactured home loans. The budget requests a limitation of $25 billion on loan guarantees for the GI/SRI Fund because, as the request explains, its mortgage insurance programs are designed to operate without the need for subsidy appropriations, with fees set higher than anticipated losses. This is $10 billion lower than was requested in the FY26 budget.

The budget requests commitment authority for Ginnie Mae to guarantee $600 billion — up from the $550 billion requested for FY26 — in new mortgage-backed securities and provides $56 million in spending authority from offsetting collections for the salaries and expenses of Ginnie Mae, a $1 million increase over what was requested for FY26.

USDA Program Funding

The budget requests $20.8 billion in discretionary funding for USDA in FY27, a $4.9 billion or 19 percent decrease from FY26 enacted levels and $2.2 billion less than the administration requested for FY26. The Section 502 Single-Family Guaranteed Loan Program would be funded at a $20 billion loan level, down from the FY26 enacted level of $25 billion. The 502 Single-Family Direct Loan Program would receive $983 million, a $17 million or two percent decrease from FY26 funding levels.

The budget would grant USDA authority to continue the rental assistance decoupling pilot program for an additional 5,000 units. The pilot program allows USDA to preserve the affordability of units within Section 515 and 516 properties that have maturing USDA mortgages. The budget uses the continuation of the pilot program as justification to eliminate funding for the Section 542 Rural Voucher Rental Assistance Program, which received $48 million in FY26 appropriations.

The Section 521 Rural Rental Assistance Program would be funded at $1.795 billion, an $80 million or five percent increase over FY26 funding levels.

Affordable Housing Programs in Broader Budget Documents

The administration released thematic fact sheets as part of its budget request, as it did last year. These fact sheets again called out and slated for termination the Pathways to Removing Obstacles to Housing Program and the Community Development Financial Institutions Fund, arguing the programs contradicted the Trump Administration’s priorities and citing examples of how the administration believes some funds were misused.

NCSHA will distribute a more detailed summary of the administration’s FY27 Budget Request next week.