May 14, 2026
Housing and Urban Development Budget Hearings Update
Department of Housing and Urban Development (HUD) Secretary Scott Turner testified over the last three days before House and Senate leaders about President Trump’s proposed budget for Fiscal Year 2027, which would cut many programs and implement new agency rulemaking and regulatory reforms.
In both hearings, there was bipartisan skepticism of the proposed cuts to programs like CDBG and Tribal housing.
Secretary Turner was often unable to provide in-depth answers to questions for further details on HUD activities. He stressed that HUD would maximize the available budget while shifting blame for delays in reports on homelessness and grant notices for soon-to-expire funds to recent government shutdowns, ongoing litigation, and alleged dysfunction under the previous administration.
President’s Budget Request: The Administration proposed $73.5 billion, a decrease of $8.9 billion from Fiscal Year 2026 levels, including a $922 million cut to homelessness programs.
HUD is implementing a $30 million program dubbed Project HUGS to track grant spending and combat alleged waste, fraud, and abuse among public housing authorities. Project HUGS is in addition to proposed rules introducing working requirements and rental limits, and significant cuts to housing construction, homelessness support, and key grant programs, including:
• Eliminating the Community Development Block Grant (CDBG) • Eliminating Housing Opportunities for Persons with AIDS (HOPWA) • Eliminating Continuum of Care (CoC)
• Eliminating the Self-Help Homeownership Opportunity Program (SHOP) • Eliminating the HOME Investment Partnerships program
• Eliminating the Family Self-Sufficiency program
• Eliminating the Section 4 and Rural Capacity Building programs • A 7 percent cut to Section 202 and Section 811 housing programs
Many of the cuts were justified by Secretary Turner as refocusing programs with diversity, equity, and inclusion components.
Committee leadership from both parties explicitly disapproved of the budget.
Chair of the House Appropriations Committee Tom Cole (R-OK) reminded members of their fiscal “power.” Chair of the Senate Subcommittee Cindy Hyde-Smith (R-MS) was “disappointed” about the proposal to eliminate CBDG, which she described as an “essential resource” with strong bipartisan support.
The funding disagreements were framed within the context of competing congressional priorities between transportation and housing, especially as Infrastructure and Investment Jobs Act (IIJA) money expires. Senate Chair Hyde-Smith argued that even as cuts are being proposed, there are specific policy areas where HUD could be more flexible, such as by expanding the Moving to Work (MTW) demonstration program and streamlining FHA financing for multifamily housing.
Revamping Continuum of Care: Secretary Turner described “housing first” as a failed model, including CoC, and argued in favor of alternative approaches. A notice of funding opportunity will be announced on June 1st for the revamped program, which will focus on offering wraparound services.
Secretary Turner verbally committed to disbursing Q3 and Q4 grant funds as appropriated by law. Democrats expressed their frustration with the Secretary’s unwillingness to release the grants approved by Congress unless compelled by court order and the subsequent disruption to housing services. In addition, Senate Ranking Member Kirsten Gillibrand (D-NY) characterized HUD’s new terms and conditions for grants as illegal and burdensome.
Secretary Turner was unable to answer questions from Congresswoman Rosa DeLauro (D-CT) about the impact of eliminating CoC on housing providers, including how many beds would be eliminated and how many children would lose housing.
Sustaining the Native American Housing Assistance and Self-Determination Act: The proposed budget would reduce spending on Tribal housing by 44 percent, compounded by a 20 percent decrease for Indian Housing Grants. Funding for the Section 184 loan program would increase. Secretary Turner argued that significant progress had been made in Tribal housing and that HUD was maximizing its budget as a result. Chair Cole responded that the committee would not abide by cuts of that magnitude to Tribal housing programs, emphasizing the significant trust responsibility of the federal government to Tribal nations.
Confrontation on Mixed Status Rulemaking: HUD is “feverishly” collecting data under its memorandum of understanding with the Department of Homeland Security and as part of its broader effort to prioritize U.S.-born citizens for housing opportunities. Democrats broadly panned Secretary Turner for the new rule and voiced concerns that eligible U.S.-born citizen children would be separated from their families or denied housing. The rulemaking was characterized as an illegal interpretation of the Housing and Community Development Act.
Expanding Credit Score Models: Republican committee members repeatedly expressed their support for increased mortgage competition and expansion of credit score models to VantageScore 4.0 and FICO 10T, which they argued would help younger generations become first-time homeowners. Secretary Turner also claimed that the change would allow hometown lenders and community banks to return to the housing market after the passage of Dodd-Frank diminished their role.
Streamlining Build America Buy America: Several Republicans were concerned with the waiver process for BABA, which is completed on an individual project rather than product basis.
Secretary Turner blamed the Biden administration for creating a faulty system and assured members that HUD staff were actively working to resolve issues with policy guidance. He offered no details on how HUD would streamline the process.