On May 2, 2025, President Donald Trump released his Fiscal Year (FY) 2026 Budget Request. The proposal, known as a “skinny budget,” was sent to Congress and outlines the administration’s high-level spending goals for the forthcoming year.
It is crucial to note that a first year President’s budget proposal is mostly a symbolic requirement of a new administration. The skinny budget does not give full details on proposed spending cuts for every line item. Rather, it aims to provide a roadmap to Congress and committee leadership on where the President would like to see the final funding levels for the federal government land. Ultimately, however, Presidential budget requests meet the reality of Congress – where, this year, bipartisan support will be needed to pass a budget out of the Senate.
Key Takeaways
Broadly, the President’s proposal calls for total spending of $1.7 trillion in FY 2026 – proposing a $163 billion cut in non-defense discretionary spending to $557 billion, a 23 percent drop from the enacted FY 2025 level.
The administration is requesting significant cuts pertaining to housing. Key areas include:
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A 43 percent or over $33 billion decrease in funding from the Department of Housing and Urban Development’s (HUD) FY2025 enacted levels.
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A $26.7 billion decrease from several programs, including funding for Tenant Based Rental Assistance (TBRA) and Project Based Rental Assistance (PBRA)
- The Budget would also newly institute a two-year cap on rental assistance for able-bodied adults and ensure that a majority of rental assistance funding through states would go to the elderly and disabled.
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Complete elimination of the Community Development Block Grant (CBDG) program, the HOME Investment Partnerships Program, and the Pathways to Removing Obstacles Housing (PRO Housing) funding that closely aligns with the Yes in My Backyard (YIMBY) legislation that the National Apartment Association (NAA) has long supported and would incentivize localities to reduce barriers to housing construction.
Additional cuts include:
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$532 million from “homeless assistance program;"
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$296 million from surplus lead hazard reduction and healthy homes funding; and
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$196 million from self-sufficiency programs.
Of note, the skinny budget seeks an increase of $74 million for the U.S. Department of Agriculture’s Rental Assistance program.
Collectively, non-defense agencies would see funding cuts of at least 15 percent, codifying many of the changes already made by the Department of Government Efficiency. Exceptions include the Department of Health and Human Services (HHS), the Department of Transportation, the Department of Veterans Affairs and the Social Security Administration.
What’s Next
NAA continues to closely monitor and participate in the Congressional budget process over the coming months. As outlined in the skinny budget, many of these proposed cuts are going to be politically challenging to attain - especially in the Senate, where the appropriations process must be conducted on a bipartisan basis.
For our part, NAA is concerned with the scale of these proposed cuts to HUD programs like Section 8 and HOME, both of which are incredibly important for affordable rental housing providers. NAA's view remains that there are reforms to be made to both programs that can increase their efficiency and effectiveness. For example, the Choice in Affordable Housing Act, already introduced in the 119th Congress, would remove duplicative requirements and burdensome red tape to ultimately streamline Section 8 – increasing voluntary housing provider participation and improving housing outcomes for low- and moderate-income renters. As well, NAA and the National Multifamily Housing Council recently submitted comments as part of a bipartisan effort to reform the HOME program by Representatives Mike Flood (R-Neb.-1) and Emmanuel Cleaver (D-Mo.-5), the Chairman and Ranking Member, respectively, of the House Financial Services Subcommittee on Housing and Insurance.