This week, I will be joined on Capitol Hill by colleagues from the Corporation for Supportive Housing, Catholic Charities USA, and Homeward VA (Richmond, VA Continuum of Care) to educate Congressional staff on why federal funding for homelessness is so important.
In this briefing, sponsored by Senator Tina Smith, we’ll inform Congressional staff of catastrophic impacts of the President’s budget proposals on homelessness in the United States.
So, in this week’s CEO Corner, I want to share what you need to know about recent developments in the FY2026 budget. There are two major items:
- the President’s budget request for FY2026
- a budget reconciliation bill. (You may have heard the Administration refer to it as the “One, Big, Beautiful Bill Act.”)
It can be confusing, I know. But they are both important and worthy of our collective attention.
The President’s budget request is the Administration’s annual set of recommendations to Congress for the regular Fiscal Year 2026 (October 1, 2025 – September 30, 2026) process.
The other fiscal bill currently being considered by Congress uses a special legislative process called “reconciliation” to quickly advance high-priority fiscal legislation. Reconciliation allows Congress to make significant changes in law through a relatively fast-track procedure. Budget reconciliation legislation requires a simple majority adoption with limited time for debate and a restrictive amendment process. Perhaps most importantly, this means that the bill cannot be blocked by a filibuster in the Senate. Congress used this process most recently to fund programs during the COVID-19 pandemic through the American Rescue Plan Act of 2021 and the Inflation Reduction Act of 2022.
The President’s FY26 Budget Request and Impacts on HUD Funding
Last week, the White House released more documents about the administration’s FY2026 budget proposal, which Congress will likely use to shape the federal government’s spending amounts for FY26. These documents dive deeper than the previously-released “skinny budget.”
The Administration proposes massive changes to the U.S. Department of Housing and Urban Development’s (HUD) budget that would have devastating impacts to prevent and end homelessness in the United States.
Alliance staff members have read through the proposed changes and cuts to programs related to homelessness, and how they may differ from the original budget request.
Homeless Assistance Grants
The President’s budget proposal seeks to collapse the Continuum of Care (CoC) program and the Housing Opportunities for Persons with AIDS (HOPWA) program into the Emergency Solutions Grants (ESG) program. Collectively, the funding currently allotted to HUD’s Special Needs Assistance Programs (ESG, CoC, and HOPWA) would be cut by $532 million. This will:
- reduce Homeless Assistance Grants funding by $27 million and zero out the budget for the HOPWA program (currently funded at $505 million), effectively eliminating housing assistance for thousands of people living with HIV or AIDS;
- eliminate funding for activities and grants that are only eligible under the CoC program, including Permanent Supportive Housing, CoC Planning, and dedicated grants for the operation and administration of coordinated entry and Homeless Management Information Systems (HMIS);
- and switch to a formula, rather than a competitive application, to determine allocation of funds (thereby eliminating the CoC Program competition, reducing transparency in the federal granting process, and placing thousands of currently-operating programs — and the hundreds of thousands of people they serve — at risk
Federal Rental Assistance
The President’s budget proposal seeks to eliminate most federal rental assistance programs, including Tenant-Based Rental Assistance, Public Housing, Project-Based Rental Assistance, Section 811 (Supportive Housing for Persons with Disabilities Program), and Section 202 (Supportive Housing for the Elderly Program).
In its place, the administration seeks to create a new State Rental Assistance Program at a total cost of $36.2 billion. This is significantly less than the cumulative total of the current funding for the programs it would replace.
The President’s budget proposal does not include any continued funding for Emergency Housing Vouchers, placing the 59,000 households currently being assisted at immediate risk of homelessness.
Other Significant Programs
The President’s proposal seeks to eliminate the Community Development Block Grant (CDBG) program as well as the HOME Investment Partnerships Program (HOME) program, which provide resources to strengthen community infrastructure and for needed affordable housing strategies. It also reduces funding for fair housing initiatives by more than half, down to $26 million.
The FY2026 Budget Reconciliation Bill
On May 22, 2025, House Republicans recently narrowly passed a sweeping tax and budget bill — the “One Big Beautiful Bill Act” — which now moves onto the Senate. This is a separate bill from the FY26 appropriations process.
By weakening the already fragmented social safety net, this bill will jeopardize housing for millions of Americans, decrease access to healthcare, and threaten the ability for people experiencing homelessness to access services and resources.
If passed, this bill will also cut access to Medicaid and the Supplemental Nutritional Assistance Program (SNAP). These are life-saving benefits and services for people experiencing homelessness:
- Medicaid Cuts Medicaid represents a healthcare lifeline for millions of people across the country. Yet bill provisions seek to impose even more paperwork onto recipients, disproportionately impacting people experiencing homelessness.
- For example, many unhoused people will struggle to comply with proposed residency verifications, such as a stable address.
- Inevitably, many people will lose access to Medicaid, putting countless lives and livelihoods at risk.
- Removing SNAP exemptions will increase food insecurity. This bill seeks to not only to remove current exemptions for people experiencing homelessness, but to also introduce work requirements and other barriers for them.
How to Take Action
These legislative proposals and bills will have catastrophic impacts on people experiencing homelessness unless we all act now.
Urge your Member of Congress to reject the President’s budget proposal and instead fund the Homeless Assistance Grants account at $4.922 billion.
Additional Resources
Although the primary target of our advocacy is HUD’s Homeless Assistance Grants funding, we work closely with our national partners (such as the National Low Income Housing Coalition and the National Health Care for the Homeless Council). These organizations, among others, lead federal advocacy efforts that address the needs of people experiencing homelessness and those who are at risk.
Join efforts to protect all HUD programs and staff:
- Take Action | National Low Income Housing Coalition
- Take Action to Protect Federal Housing Funding in FY26 with NLIHC’s Advocacy Toolkit! | National Low Income Housing Coalition
Sign on to protect Medicaid:
Protect Emergency Housing Vouchers:
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