FY 2026 Funding Bills for the Department of Housing and Urban Development and the United States Department of Agriculture Advance
CARH.org — July 31, 2025
Background
Both the House of Representatives and the Senate are continuing to advance their various appropriations bills that will fund the federal government in Fiscal Year (FY) 2026, which begins on October 1, 2025. Funding for the United States Department of Agriculture’s (USDA) Rural Development (RD) housing programs and the Department of Housing and Urban Development (HUD) will likely be considered by the full House of Representatives and the Senate shortly after the August recess.
Rural Development’s Housing Programs
On June 25, 2025, the House Appropriations Committee, by a vote of 35-27, agreed to report H.R. 4121, the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill for FY 2026. The Senate Appropriations Committee followed with its version of USDA’s FY 2026 funding bill and voted 27-0 on July 10, 2025, to advance S. 2256. As CARH members can see from the attached chart, there are few differences between the two versions of the funding bills. There had been proposed cuts to some housing programs in the Administration’s proposed budget for FY 2026. However, both bills would restore much of that funding. Some of the highlights include:
$1.715 billion for the Section 521 Rental Assistance (RA) program, with language that the RA contract was for 20 years, subject to annual appropriations.
$48 million for the Section 542 Voucher program. The Administration had proposed not funding the program.
The House would fund the Section 515 program at $50 million, and the Senate would provide $60 million. The Administration had proposed not funding the program.
The House would fund the Multifamily Preservation and Revitalization (MPR) at $30 million, with the Senate level at $34 million. The Administration had requested $15 million.
$400 million in budget authority for the Section 538 program.
Language that would continue the demonstration program for decoupling authority for the Section 521 and Section 515 programs for when a property’s mortgage matures. The House would authorize 1,000 units in FY 2026, and the Senate would authorize 5,000 units under the Stand Alone Rental Assistance (SARA) demonstration program. These numbers need to be reconciled in conference.
Both bills would encourage USDA to upgrade the multifamily housing technology, particularly as it relates to the SARA program.
Department of Housing and Urban Development
The Administration’s proposed budget for HUD would have eliminated many programs or changed the delivery of programs, with responsibility for administration being delegated to the states. The House Appropriations Committee voted to report H.R. 4552, the Transportation, Housing and Urban Development and Related Agencies Appropriations bill for FY 2026 on July 17, 2025, by a vote of 35-28. The Senate Appropriations Committee voted 27-1 on July 24, 2025, to report S. 2465, its version of the HUD FY 2026 funding bill. Both bills rejected the Administration’s proposal to block-grant HUD’s Rental Assistance programs to the states. The Senate would provide $73.3 billion for HUD programs, whereas the House is at $67.8 billion. The attached chart provides the differences between the Administration’s request to the House and Senate Appropriations Committees’ recommended funding levels.
Some of the highlights of the funding bills for HUD include the following:
$37.4 billion for Tenant-Based Rental Assistance under the Senate bill. This level of funding is $2.1 billion higher than the House bill. The Administration had proposed block-granting this program to the states.
$17.804 billion for Project-Based Rental Assistance under the Senate bill. This level of funding is $677 million higher than the House bill. Again, the Administration had proposed block granting this program to the states.
The Senate would provide $3.1 billion for the Community Development Block Grant formula grant program. The House would provide $3.3 billion. Again, the Administration proposed eliminating this program.
The Senate would reinstate funding for the HOME program by providing $1.25 billion. Both the House and the Administration proposed eliminating funding for the program. There was a concerted effort on the part of several affordable housing groups to advocate for funding of the HOME program. CARH, being one of those groups, cosigned three different letters as funding was being discussed in the House and Senate Committees. See ACTION Campaign letter (July 17); HOME Coalition letter (July 22); and Real Estate Stakeholders letter (July 23).
The Senate would fund Section 202 Housing for the Elderly program at $972 million. This is $22 million higher than the House level of funding. The Administration had proposed eliminating funding for this program.
Action Needed During the August Recess
As CARH outlined in our Broadcast Email from July 30, regarding the ROAD to Housing Bill, it is important that members also contact their members of Congress regarding funding for affordable housing programs administered by RD and HUD. Members should advocate for the higher of the House or Senate number, particularly as those funding levels impact Rental Assistance. In the reconciliation and tax bill that recently passed Congress and was signed into law by the President, the Housing Credit program received an allocation increase. Without adequate funding for RA, this Housing Credit increase will not achieve what was envisioned. In addition, it is important to emphasize the HOME program and the role it has played in allowing transactions to go forward, as construction costs have continued to increase and interest rates have also increased.
Also in CARH’s July 30th Broadcast Email on the ROAD to Housing Bill, we indicated our continued support for permanent legislative solutions that would authorize the full decoupling of RA from maturing Section 515 loans. However, until that legislation is enacted, the industry remains dependent on annual appropriations to carry out these preservation efforts. The current SARA demonstration program is not yet permanent law and therefore remains entirely dependent on congressional funding each year. Similarly, the MPR program must be funded annually to remain viable. As more Section 515 and Section 514 properties approach mortgage maturity, strong appropriations are essential to ensure these interim preservation tools remain available until a permanent framework is in place. CARH members play a vital role in making the case to Congress that these programs must be fully funded now, even as we continue to push for longer term solutions.
It is important that members reach out to the Representatives or Senators who represent the district or state where your properties are located. Once you have reached out to your members of Congress, please let CARH know the response you receive in return. Also, during the August recess, it would be a great time to invite your members of Congress or their staff to visit your property. If you do schedule a visit, please forward that information to CARH. We can be reached via email at carh@carh.org.
To contact your Senator, click here. To contact your Representatives, click here.
CARH’s board of directors will meet at the end of September and will raise all these issues with the members of Congress and their staff during the board’s Capitol Hill visits.
Please contact the CARH National Office at carh@carh.org or 703-837-9001 should you have questions or concerns.
