The Trump Administration released its FY 2027 budget request this morning, and while Congress will ultimately decide federal spending levels, the proposal offers an early signal of where the Administration wants to go on housing and community development.

At a high level, the budget requests $73.5 billion for HUD, which is lower than both the FY 2025 enacted level ($77 billion) and the FY 2026 enacted level ($84.2 billion). That said, it is a dramatic increase from last year’s FY 2026 request of just $43.5 billion, which would have relied on block‑granting and cutting Section 8 and public housing to achieve savings. Notably, the FY 2027 request does not propose cuts to Section 8 or public housing, nor does it call for block‑granting either program. Given that Congress overwhelmingly rejected those proposals in the FY 2026 THUD spending bill, this is an important—and welcome—shift from prior years.

There is nothing in the budget related to the Low‑Income Housing Tax Credit or other housing tax provisions and the Treasury is not expected to release a Green Book this year, so no significant tax policy proposals were expected,

Unfortunately, the budget continues to call for the elimination of several longstanding housing and community development programs, including CDBG, HOME, Homeless Assistance Programs (HAP), HOPWA, Native American housing programs and block grants, the Pathways to Removing Obstacles (PRO) program, fair housing activities, and housing counseling. These proposals mirror past budgets and, once again, cut against strong bipartisan support in Congress for these programs.

The budget does include a small number of new or expanded housing‑related requests including $30 million for a “Program Integrity Initiative” focused on fraud prevention in rental assistance programs, $30 million for the Foster Youth to Independence Initiative (an increase of $5 million and a program renaming), and $16 million for FHA administrative costs to support sustainable homeownership.

Housing and community development appear only twice in the Administration’s high‑level budget fact sheets, both under the label “Cuts to Woke Programs.” These sections reprise language from last year’s budget and single out the PRO housing grants and the Community Development Financial Institutions (CDFI) Fund. In both cases, the budget materials criticize past grants for supporting local equity‑focused planning efforts, community lending, and climate‑related investments, using specific examples from cities and organizations across the country.

For California, the stakes are especially high. Programs like CDBG, HOME, PRO, CDFI funding, homeless assistance, and fair housing grants play an outsized role in supporting affordable housing production, preservation, and tenant protections in a high‑cost state with severe housing shortages. California jurisdictions have been significant users of PRO grants to modernize zoning and streamline production, and CDFIs are a critical source of financing for affordable housing, small developers, and underserved communities throughout the state. Eliminating these programs would have real consequences for local governments and housing providers trying to address both affordability and homelessness.

It’s also worth underscoring that Congress has already sent a clear message. Similar proposals were rejected last year on a bipartisan basis, and there is little indication that lawmakers are eager to revisit deep cuts to core housing and community development tools—particularly as housing costs and homelessness continue to rise nationwide.

Looking ahead, we’ll be watching how the House and Senate Appropriations Committees respond to the Administration’s proposed eliminations, particularly for CDBG, HOME, homeless assistance, PRO, fair housing, and housing counseling. These are programs Congress has repeatedly restored with bipartisan support. We’ll also be paying close attention to early topline numbers and subcommittee allocations in the FY 2027 THUD bills, which will give the clearest signal of where funding levels are actually headed. Finally, we’ll be tracking how California’s delegation engages in this process, especially given the state’s acute affordability and homelessness challenges and its heavy reliance on federal housing and community development tools.

As always, CCAH will stay closely engaged and keep members updated as the Federal budget process unfolds—and as opportunities arise to reinforce the critical role these programs play in addressing California’s housing needs.