Administration’s Fiscal Year 2027 Proposed Budget Released

CARH’S BROADCAST E-MAIL – Legislative Alert

April 14, 2026

On Friday, April 3, 2026, President Trump’s Administration released its proposed budget for Fiscal Year (FY) 2027. The proposed budget proposal for FY 2027 asks Congress for $1.5 trillion in defense spending – a 42% increase – while cutting nondefense spending by $73 billion, or 10% from the current FY 2026 level. The proposed spending levels will no doubt set the stage for what is likely to be another contentious appropriations process with Capitol Hill.

As CARH members can see, the requested levels of program funding for the housing programs within the United States Department of Agriculture’s (USDA) Rural Development (RD) and the Department of Housing and Urban Development (HUD), can be found in the following funding charts: USDA budget chart and HUD budget chart. Some of the program requested levels include the following:

United States Department of Agriculture—Rural Development

The Section 521 Rental Assistance (RA) program is proposed to be funded at $1.795 billion.  This is an increase of $80 million over the FY 2026 level. Language providing for 20-year RA contracts, subject to annual appropriations would continue. Assumptions are that the proposed level will provide enough funding for existing contract renewals, plus units that will receive Stand Alone Rental Assistance (SARA) contracts, from the continuation of the demonstration decoupling program.

In FY 2026, RD was limited to offering SARA contracts to 5,000 units. In FY 2027, that limit has been removed. Also included is language that allows RD to make a rent adjustment by using a budget-based rent level, if an owner can show that rents need to be adjusted beyond HUD Fair Market Rents (FMRs) and the Operating Cost Adjustment Factor (OCAF) to support project operations.

The Section 542, Rural Housing Voucher program which provides vouchers for residents living in properties which have been foreclosed, or owners who are prepaying their mortgages, would be zeroed out. In FY 2026, the program received $48 million. Zeroing out this important source of rental assistance would be problematic for residents, particularly seniors and handicapped/disabled individuals.

The Section 515 and the Multifamily Revitalization and Preservation (MPR) programs would receive $50 million and $30 million respectively, the same level of funding as provided for in FY 2026.

The Section 538 Guaranteed Rural Rental Housing Program would provide budget authority of $500 million. This level of funding would be $100 million over the FY 2026 level.

Department of Housing and Urban Development

The Administration’s FY 2027 budget request includes a 13 percent ($10.7 billion) reduction in funding for HUD compared to FY 2026, which of the non-defense discretionary amount, is $73.5 billion in budget authority for HUD for 2027. Unlike last year’s proposal, which would have consolidated HUD’s five major rental assistance programs into a single block grant, the FY 2027 request retains the current structure for those programs. However, it proposes to combine homelessness assistance programs and eliminate community development programs. The budget also introduces significant policy changes such as work requirements and time limits for rental assistance through its appropriations language.

The Section 8 Project-Based Rental Assistance program would be funded at $17.6 billion which is $903 million less than the FY 2026 level. Funding for contract renewals and amendments to contracts also would include $61 million for contracts converted to PBVs via the Rental Assistance Demonstration (RAD) program, thus requiring PBRA budget authority for the first time. In a similar vein, housing choice vouchers, also known as tenant-based rental assistance, would be funded at $38.8 billion. This is $407 million over the FY 2026 funding level.

Both the HOME and Community Development Block Grant (CDBG) programs would be eliminated. The FY 2026 proposed budget also proposed elimination of the programs. Congress on the other hand approved $1.25 billion for HOME and $7 billion for CDBG in FY 2026.

The budget also proposes to eliminate the public housing cap on the RAD program, just like the housing authorization legislation pending in Congress, H.R. 6644, the 21st Century ROAD to Housing Act, would do.

The request proposes $30 million for a new Program Integrity Initiative aimed at reducing fraud, waste, and abuse within Federal housing programs. According to the Office of Management and Budget (OMB), the funds would support efforts to improve financial reporting, transparency, and oversight of recipients and subrecipients of HUD assistance. The initiative would focus on preventing Federal rental assistance from being paid on behalf of deceased tenants or ineligible non-citizens and on ensuring that program funds are not directed to entities engaged in prohibited activities.

Both the House and Senate Appropriations Committees have scheduled hearings beginning this week on the proposed budget. Efforts will certainly be made to have the individual subcommittees quickly forge their versions of the funding bills so that these legislative measures can be passed prior to mid-summer. However, given the numerous differences not only between the House and Senate but also with the Administration, passage of the bill may prove challenging. CARH will continue advocating for the affordable housing programs our members rely on and urges you to contact your members of Congress to express your support.

To contact your Senators, click here.
To contact your Representatives, click here.

For other news and information affecting the affordable rural housing industry, please visit the Newsroom on CARH’s website, www.carh.org.