A Closer Look at the FY 27 White House Budget Request

Proposal Pairs Harmful Cuts with Devastating Policy Proposals 

On April 3, the White House released its FY 27 Budget Request for HUD programs. The release of the Administration’s budget request formally kicks off the FY 27 appropriations process.

While the request does not propose block-granting housing assistance programs—as the President’s FY 26 budget request did—it does include harmful cuts to much-needed affordable housing programs. Further, the Administration’s proposed policy changes would result in HAs serving thousands of fewer families and would threaten the solvency of many affordable housing developments.

While PHADA once again expects Congress to reject the harmful cuts and policy provisions requested by the Administration, the Association will continue to advocate for maximum funding and flexibility for affordable housing programs. PHADA also urges members to advocate for maximum funding as well; interested members may find the Industry Appropriations Request useful.

Marginal Increases for Some Core HA Programs, but Cuts to Other Areas

For core HA programs, the President’s budget request proposes:

• Public Housing Operating Fund: $5.377 billion, a nearly 15% increase from FY 26’s damaging cuts exacerbated by delays in the appropriations process. However, the administration has proposed zeroing out public housing shortfall funding. Taken together, the budget request would represent a 7% increase in combined public housing operating and shortfall funding over FY 26 enacted levels.
• Public Housing Capital Fund: $3.2 billion, the same as was enacted in FY 26 and several prior years. Of course, given inflation and increasing regulatory burdens—most notably Build America, Buy America (BABA) requirements—flat funding represents a functional cut to the resources needed to ensure the public housing stock continues to provide safe and decent housing to low-income families.
• Voucher Contract Renewals: $35.565 billion, a marginal 1.7% increase over FY 26 enacted levels. While rent inflation has cooled in recent months, HUD is once again projecting extensive voucher shortfalls in calendar year 2026. PHADA will continue to advocate for full funding for the voucher program.
• Voucher Administrative Fees: $2.921 billion, a 3% increase over FY 26 enacted levels. Despite this small increase, this amount would not fully fund admin fees, which are essential for ensuring that HAs maximize the number of low-income families served.

Outside of core HA programs, however, the budget request proposes devastating cuts to other affordable housing and community development programs. These include:

• Eliminating all funding to the Family Self-Sufficiency (FSS), Resident Opportunities and Self-Sufficiency (ROSS), and Jobs-Plus programs. These proposed cuts are especially stark as the Administration emphasizes the benefits of job training programs in its proposed work requirements and time limits rule.
• No funding or policy flexibilities to continue support for Emergency Housing Vouchers, which provide housing stability to formerly homeless individuals and those fleeing domestic violence.
• Zeroing out funding to the Community Development Block Grant (CDBG) and HOME programs. If enacted, these cuts would challenge local governments to provide needed community development services and housing assistance, including gap financing for Low-Income Housing Tax Credit (LIHTC) projects.
• Cutting funding for Project-Based Rental Assistance (PBRA) properties by 5%. Combined with the proposed rent freeze noted below, this would threaten the fiscal solvency of many PBRA properties.

Policy Riders Would Shrink Voucher Program, Stop Rent Increases 

While this year’s budget request does not include the harmful funding cuts to core HA programs that were requested in FY 26, it does propose harmful policy riders that would result in HAs serving thousands of fewer low-income families. PHADA strongly urges Congress to reject these harmful policy proposals.

Like last fiscal year, PHADA expects Congress to reject the President’s budget and again work in a bipartisan manner to negotiate HUD appropriations.

Most notably, the Administration has proposed prohibiting HAs from issuing any new or turnover housing vouchers in FY 27, except for Veterans Affairs Supportive Housing (VASH) and Family Unification Program (FUP) vouchers. The provision would also prohibit HAs from entering into any new project-based voucher commitments in FY 27 except for those associated with Rental Assistance Demonstration conversions. 

Another harmful proposal would allow HUD to not provide rent adjustments for PBRA, Section 202 (Housing for the Elderly), and Section 811 (Housing for Persons with Disabilities) properties during FY 27. Such rent adjustments are required under the Multifamily Assisted Housing Reform and Affordability Act (MAHRAA). Given rising costs, not providing rent increases in FY 27 could threaten the continued operation of many multifamily housing developments.

Other concerning policy proposals include:

• Restricting eligibility for Tenant Protection Vouchers (TPVs) to public housing units that were occupied in the last 12 months—instead of the 24-month timeframe allowed now. 
• Eliminating the development of public housing as an allowable use for capital funds.
• Resetting HAs’ Faircloth units to the number of public housing units currently under Annual Contributions Contracts, which would functionally eliminate the Restore-Rebuild program (formerly known as Faircloth-to-RAD). Restore-Rebuild has proven a cost-effective way for HAs to develop new affordable housing units, and PHADA will advocate strongly against this proposal becoming law.

The budget request does include some policy proposals that PHADA supports, including:

• Providing full fungibility between public housing operating and capital funding for all HAs,
• Providing greater flexibilities for HAs to administer special purpose voucher programs,
• Eliminating the RAD unit cap,
• Extending the ability of HUD to conduct Mark-to-Market rent adjustments to 2029, and
• Continuing funding fungibility and flexibility for Moving to Work HAs.

President’s Budget Kicks off the FY 27 Appropriations Process

PHADA reminds members that the White House budget request is the beginning—not the end—of the FY 27 appropriations process. Like last fiscal year, the Association expects Congress to reject the President’s budget and again work in a bipartisan manner to negotiate HUD appropriations.

Given competing legislative priorities and the upcoming fall elections, Congress will likely fail to pass all 12 appropriations bills by the end of the federal fiscal year on September 30. The potential transfer of control of at least one chamber of Congress will add another wrinkle to the appropriations process. It is likely that Congress will need to pass at least a short-term Continuing Resolution, likely through early 2027, to maintain funding for critical programs.

PHADA will continue to keep members updated regarding the appropriations process through the Advocate, Breaking News, social media, and eBlasts, and urges members to advocate for maximum HUD funding to their elected officials.