There has been a tremendous amount of consternation about the future of Section 8 funding in the coming fiscal year. This concern is well-founded—this funding is a lifeline for millions of households nationwide, and thousands of affordable housing developments rely on subsidies from these programs to enable them to serve low-income households.
In May, the Trump administration released a preliminary version of the president’s fiscal 2026 budget. This budget proposal covers the fiscal year that will start Oct. 1. The major theme in this budget proposal is unsurprising. It emphasizes the administration’s goal to shrink the size of the federal government. The proposal seeks to cut federal non-defense discretionary spending, which includes reducing the Department of Housing and Urban Development (HUD) budget by roughly $33 billion.
Of particular concern was a proposal to consolidate all of HUD’s rental assistance programs—public housing, project-based rental assistance (PBRA), tenant-based vouchers (Section 8), and the Section 202 and 811 programs—into a block grant-type program to be allocated to states. The total budget for this new block grant program would be $26.7 billion less than what is allocated to these programs today, representing a proposed cut of 44%. The administration also proposed a two-year cap on assistance and a targeting of assistance to the elderly and disabled.
While this proposal alarmed many observers, the concerns may be tempered by the reality of the federal budget process and the affordable housing industry’s broad support in Congress. In any year, regardless of which political party controls Washington, the president’s budget is viewed as a framework and articulates the administration’s priorities. The subsequent drafting of appropriations bills falls to the House and Senate.
Since this administration took office in January, Congress has made moves to protect PBRA and the Section 8 voucher program, including providing additional funding in the continuing resolution for the remainder of the current fiscal year to keep up with year-over-year cost increases. We are hopeful this indicates Congress’ understanding of the importance of these programs and a desire to protect them and the households and housing served by them.
Since the rollout of the administration’s budget proposal, the House and Senate subcommittees that oversee the HUD budget have held hearings. HUD secretary Scott Turner appeared at each. In both chambers, the Republican chairs of the subcommittees expressed deep concern over the administration’s proposed reduction to HUD’s rental assistance programs. Lawmakers questioned how HUD plans to maintain its mission of serving low- and moderate-income communities amid these cuts. They called for a detailed explanation of the proposed state rental assistance program, which they said lacks clarity on its implementation and effectiveness.
On July 17, the House Appropriations Committee approved its version of the HUD budget, which provided the following levels of funding for these two programs: $35.3 billion for tenant-based rental assistance, which would be $773 million lower than the fiscal 2025 level; and $17.1 billion for project-based rental assistance, which would be $237 million higher than the fiscal 2025 level.
On July 24, the Senate Appropriations Committee approved its version of the HUD budget, which provided the following levels of funding for these two programs: $37.4 billion for tenant-based rental assistance and $17.8 billion for project-based rental assistance. These numbers represent more than a billion-dollar increase in each program, well over the House numbers and more than the fiscal year 2025 funding for each program.
While there is a long way to go before the fiscal 2026 budget is adopted, there is reason for some optimism. It appears that the current structure of each program will be preserved, and hopefully the programs will be adequately funded so they can serve at least the same number of households and continue to play a vital role in sustaining the viability of the affordable housing stock.
