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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 72 May 2025 J O U R N A L Government OMB SUBMITS PRESIDENT'S BUDGET, CALLING FOR NEARLY $33B IN HUD REDUCTIONS T he Office of Management and Budget (OMB) has sent President Trump's FY 2026 Discretion- ary Budget Request to Congress. In a letter to Sen. Susan Collins, Chair of the Committee on Appropriations for the United States Senate, OMB Director Russell T. Vought writes, "The recom- mended funding levels result from a rigorous, line-by-line review of FY 2025 spending, which was found to be laden with spending contrary to the needs of ordinary working Americans and tilted toward funding niche non-governmental organizations and institutions of higher education committed to radical gender and climate ideologies antithetical to the American way of life." Among the cuts, reductions, and consolidations found in the review is a reduction of nearly $33 billion in funds to the U.S. Department of Housing and Urban Development (HUD), nearly $27 billion in State Rental Assistance Block Grants alone. According to the budget, "The Budget empowers states by transforming the current federal dysfunctional rental assistance programs into a state-based formula grant which would allow states to design their own rental assistance programs based on their unique needs and preferences. The Budget would also newly institute a two-year cap on rental assistance for able-bodied adults and would ensure a majority of rental assistance funding through States would go to the elderly and disabled. A state- based formula program would also lead to significant terminations of federal regulations. In combination with efforts related to opening up federal lands, this model would incentivize states and the private sector to provide affordable housing. This proposal would encourage states to provide funding to share in the responsibility to ensure that similar levels of recipients can benefit from the block grant." The budget mentions the recently established partnership between HUD and the U.S. Department of the Interior (DOI) on a Joint Task Force on Federal Land for Housing to identify underuti- lized federal lands suitable for residential development, streamlining land transfer processes, and promoting policies that increase the availability of affordable housing. "President Trump's proposed 2026 housing budget will drive up homeless- ness and force apartment owners and operators out of business," commented David M. Dworkin, President and CEO of the National Housing Conference (NHC). "The budget proposal cuts nearly 44% from the Department of Housing and Urban Development—gutting criti- cal housing and homelessness programs and eliminating highly successful and bipartisan programs like HOME and Family Self-Sufficiency. Further, the budget calls for the elimination of Neigh- borWorks America—a highly effective organization that serves the housing needs of communities throughout the United States, especially in underserved rural areas in red states. These proposed reductions would have a devastating impact on millions of Americans, particularly the most vulnerable among us, and would directly lead to increased homelessness across the country and the bankruptcy of many private businesses that own and operate affordable hous- ing." National Housing Law Project (NHLP) Executive Director Shamus Roller released the following statement in response to the FY 2026 Budget: "All Americans, across race, place, and party, value the freedom to make a good living, care for our families, and live in a stable home. President Trump's proposed bud- get cuts life-saving programs that keep poor and working people housed, fed,