FY 2026 HUD Funding Enacted; Bipartisan Housing Reform Advances

After weeks of negotiation against the backdrop of a continuing resolution and broader appropriations process, Congress finalized full-year funding for the U.S. Department of Housing and Urban Development (HUD) for Fiscal Year 2026. The FY 26 appropriations bill – part of the larger Consolidated Appropriations Act – was signed into law in early February, providing $77.3 billion in HUD program funding, an increase of more than $7.2 billion over the prior year. These funding levels resulted from vocal advocacy efforts across the country following earlier budget drafts that proposed cuts.

The final HUD budget protects key housing and homelessness programs:

• Tenant-Based Rental Assistance (Section 8/Housing Choice Vouchers): Total of $38.4 billion, around $2.39 billion more than FY25 levels. Approximately $34.9 billion was allocated to renew existing contracts, which helps prevent instability for households already receiving assistance.
• Homeless Assistance Grants: About $4.4 billion, representing an increase over FY 25 and including language aimed at smoothing Continuum of Care (CoC) funding renewals to avoid lapses amid funding transitions.
• Project-Based Rental Assistance (PBRA): $18.5 billion, an increase of over $1.65 billion from the previous year, to preserve deeply affordable units tied to specific developments.
• Eviction Protection Grant Program (EPGP): $7.5 million to enable the continuation of the program, which provides legal aid and other resources to tenants facing eviction.
• Other programs like HOME Investment Partnerships and Community Development Block Grants (CDBG) are maintained at steady or modestly adjusted levels. The PRO Housing Grant, which incentivizes communities to adopt more inclusionary zoning practices that encourage affordable housing development, received $50 million, a $50 million decrease from FY 25.

The appropriations package also includes funding for the continued operation of the US Interagency Council on Homelessness (USICH), which legislators previously proposed eliminating. The package additionally improves on the House’s initial proposal by excluding harmful policies such as work requirements and minimum rent increases.

Despite the progress, some stakeholders note that funding increases do not fully offset long-term affordable housing needs. For example, public housing operating and capital funding remain below estimated requirements, and nationwide homelessness and housing instability continue to exert pressure on local systems.

Alongside appropriations, Congress continues to advance broader housing reform. Most recently, leaders of the Senate Committee on Banking, Housing, and Urban Affairs released a new bill, the 21st Century ROAD to Housing Act, an updated and expanded framework building on prior bipartisan reform efforts. The proposal revisits many elements of the earlier ROAD to Housing Act, including regulatory streamlining, modernization of HUD program administration, and expanded flexibility for public housing authorities, while incorporating lessons from stakeholder feedback over the past year. The new bill is positioned as a comprehensive package aimed at improving efficiency, accelerating housing production, and strengthening oversight across federal housing programs.

The new Senate proposal also intersects with the House-passed Housing for the 21st Century Act, which cleared the House earlier this year with broad bipartisan support. While the House bill emphasizes supply-side strategies, including zoning incentives, manufactured housing expansion, and preservation tools, and the original ROAD framework focused more heavily on HUD program operations, the 21st Century ROAD draft appears designed to bridge the two approaches. This effort signals sustained congressional interest in structural housing reform beyond annual appropriations cycles.

With FY 26 HUD funding secured and reform efforts advancing, federal housing policy is entering a new phase of execution. Stakeholders will be watching how HUD implements appropriations, especially CoC and voucher renewals, and how the 21^st Century ROAD to Housing Act fares in Congress. As these debates continue, the interplay between funding stability and structural reform will be central to federal support for rental assistance, homelessness prevention, and housing supply expansion throughout 2026.