House Appropriations cuts HUD by $5.94 billion in FY2027 markup

The House AppropriationsAppropriationsThe legislative power to decide how public money is spent.Key ConceptAppropriationsThe legislative power to decide how public money is spent.Open conceptBookmark Committee held a full committee markupCommittee MarkupThe formal session where a congressional committee debates a bill line by line, proposes amendments, and votes on whether to advance it to the full chamber.Key ConceptCommittee MarkupThe formal session where a congressional committee debates a bill line by line, proposes amendments, and votes on whether to advance it to the full chamber.Open conceptBookmark on June 3, 2026, advancing its FY2027 Transportation, Housing and Urban Development spending bill. The bill funds HUD at $71.38 billion — a reduction of $5.94 billion, or 8.3%, from the $77.3 billion Congress appropriated for FY2026. The THUD Subcommittee had advanced the same bill along a 9-to-7 party-line vote on May 21, 2026.

Congress created HUD as a Cabinet department on September 9, 1965, when President Lyndon B. Johnson signed the Department of Housing and Urban Development Act into law. The House passed the bill 217 to 184 on June 16, 1965; the Senate passed it 57 to 33 on August 11. Johnson's HUD was the first new Cabinet department since the Department of Health, Education and Welfare in 1953, and its creation was a direct answer to a postwar urban housing crisis that left millions in substandard housing with no federal enforcement mechanism to address it.

The agency opened with a mandate to coordinate federal housing programs that had previously been scattered across multiple agencies — giving the executive branch a single institutional lever over housing policy for the first time.

Congress created the Section 8 program in the Housing and Community Development Act of 1974 (Public Law 93-383), signed by President Gerald Ford. The program marked a pivot in federal housing philosophy: rather than building government-owned housing, federal dollars would subsidize private-market rent for low-income tenants, who would pay 30% of their income toward rent and the government would cover the rest. Congress launched Section 8 with $200 million in 1974. The Quality Housing and Work Responsibility Act of 1998 merged earlier certificate and voucher subprograms into the single Housing Choice VoucherHousing Choice VoucherFederal rental subsidy letting low-income families pay 30% of income toward private market rent.Key ConceptHousing Choice VoucherFederal rental subsidy letting low-income families pay 30% of income toward private market rent.Open conceptBookmark program that exists today.

The Housing Choice Voucher program now assists roughly 5 million people in 2.3 million households. Among voucher recipients, Black households make up approximately 45%, white households 35%, and Hispanic households 16%. The average annual income of an assisted household is approximately $16,000. Three in four new admissions must meet the 'extremely low income' threshold — at or below 30% of local area median income — making the program the primary federal rental safety net for the country's lowest-income renters.

The bill's largest single housing cut targets the Public Housing Capital Fund, which pays for repairs and upgrades to public housing units across the country. The House bill would reduce that fund by $914 million, a 29% cut from FY2026 levels, bringing it to $2.28 billion. Public housing authorities have spent years warning that deferred maintenance is already causing units to be condemned and removed from the affordable inventory.

HUD funding has been contested in every major budget cycle since the Reagan administration. In 1981, President Reagan's first-year budget halved public housing and Section 8 appropriations to about $17.5 billion. By 1989, HUD's budget authority had fallen from $32.2 billion to $6.9 billion — a 78% reduction over the Reagan years. That contraction directly produced the homelessness crisis of the 1980s: the number of people sleeping in shelters tripled between 1983 and 1989, according to Shelterforce's documented account of Reagan's housing legacy.

The cycle of funding cuts producing visible homelessness, followed by partial restoration, has repeated with each administration. The House FY2027 bill's 8.3% cut to HUD comes as homelessness has hit a record high of 771,480 people — the same structural dynamic Reagan's cuts set in motion four decades ago.

The bill zeroes out the HOME Investment Partnerships Program, which Congress established in the Cranston-Gonzalez National Affordable Housing Act of 1990 (Public Law 101-625), signed by President George H.W. Bush. Sen. Alan Cranston (D-CA) and Rep. Henry B. Gonzalez (D-TX) wrote the legislation to give state and local governments a flexible federal tool for constructing affordable rental units, supporting homeownership, and delivering tenant-based rental aid. HOME distributed roughly $1.3 billion annually in recent fiscal years, flowing to over 600 state and local governments.

The House bill does preserve the Community Development Block Grant program at current levels, rejecting the administration's proposal to eliminate CDBG as well. CDBG has operated since 1974 and funds infrastructure, economic development, and housing projects in cities and counties nationwide.

Tenant-Based Rental Assistance — the Section 8 Housing Choice Voucher program — receives $35.4 billion under the House bill, an increase of less than 1.5% from FY2026. The National Low Income Housing Coalition estimates that amount is insufficient to renew all existing contracts, which could leave over 46,000 households relying on Emergency Housing Vouchers without continued support. The Tenant Protection Voucher program, which helps families displaced from public housing, faces a cut of more than 50%, from $601 million to $300 million.

Advocacy organizations project that taken together, the funding shortfalls and proposed policy changes would displace more than 100,000 households from assisted housing — including at least 37,000 children.

The bill embeds policy riders that would give HUD authority to impose work requirementsWork requirementsRules requiring program recipients to work or participate in job training to receive benefitsKey ConceptWork requirementsRules requiring program recipients to work or participate in job training to receive benefitsOpen conceptBookmark of at least 20 hours per week and five-year time limits on certain recipients of federal rental assistance, including Section 8 voucher holders and public housing tenants. No major federal housing program has previously carried statutory work requirements. Federal courts blocked work requirements in Medicaid during Trump's first term, finding they conflicted with Medicaid's statutory purpose. The Cranston-Gonzalez Act of 1990 codified that the purpose of assisted housing is to provide 'decent, safe, sanitary, and affordable housing for very low-income and low-income families' — a standard housing advocates argue work requirements undermine rather than advance.

The bill eliminates the Federal Supplemental Educational Opportunity Grant program (FSEOG), which provides need-based college grants to the lowest-income students — those whose families have a zero Expected Family Contribution under federal aid formulas. Congress appropriated approximately $910 million for FSEOG in FY2026, and the program serves roughly 1.5 million students annually. The Trump administration proposed eliminating FSEOG the previous year as well; Congress rejected that proposal. The program serves students attending community colleges and regional universities serving high proportions of low-income first-generation students.

HUD Secretary Scott Turner, confirmed by the Senate in January 2026, testified before both the House and Senate Appropriations Committees in spring 2026 in support of the administration's budget framework. During those hearings, members of both parties — including Republicans on the committee — expressed concern about the scale of proposed HUD cuts and stated bipartisan support for maintaining core rental and homelessness assistance programs. The 9-to-7 subcommittee vote reflects those tensions breaking along party lines when it came time to advance the bill.

The appropriations markup process is one of Congress's core constitutional functions. Article I, Section 9 states that 'No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.' The Appropriations Committee's annual cycle begins when the president submits a budget request, moves through subcommittee and full committee markups, advances to the full House floor, then must be reconciled with a Senate version before a final bill can be sent to the president.

Congress has not passed a full set of appropriations bills on time since FY1997. FY2027 began October 1, 2026, and the federal government was operating on a continuing resolutionContinuing ResolutionA temporary spending bill that keeps the government funded when full appropriations bills haven't passed.Key ConceptContinuing ResolutionA temporary spending bill that keeps the government funded when full appropriations bills haven't passed.Open conceptBookmark as of the markup date.

The Continuum of Care homelessness assistance program faces a reduction of more than $232 million — a cut of over 5.7% from FY2026 — bringing it to $3.78 billion under the House bill. The administration's original FY2027 request had proposed eliminating the CoC program entirely and replacing it with a vastly smaller Emergency Solutions Grant program. As of the markup date, HUD data showed more than 771,000 people experiencing homelessness nationwide — a record high in available federal data.