President Joe Biden and HUD Secretary Marcia Fudge released today their full fiscal year (FY) 2025 budget request. Overall, the budget request proposes $72.6 billion – essentially level funding compared to FY24 – through the appropriations process for affordable housing and homelessness programs. The president’s funding proposal is limited by the strict spending caps agreed to by Congress and the White House under the “Fiscal Responsibility Act of 2023,” which allows for a spending increase of only 1% in FY25 compared to FY24. The president’s budget was written before Congress finalized the FY24 spending bill, which was signed into law over the weekend.
President Biden’s FY25 budget proposal also calls for $258 billion in historic investments in affordable housing outside the appropriations process through mandatory spending. While this proposal would provide significant federal investments in affordable housing and expanded housing assistance, there is no meaningful opportunity to advance the proposal in a divided Congress this year. For more details, see NLIHC’s updated budget chart.
Despite the severe spending limits, the budget would increase funding for Housing Choice Vouchers to $32.8 billion and Project-Based Rental Assistance to $16.7 billion to renew rental assistance for current households. Despite this funding increase, advocates warn that this funding level may not be sufficient to renew all housing vouchers and that Congress may need to provide additional funding to ensure housing vouchers are not lost. The budget would also provide funding to expand Housing Choice Vouchers to an additional 20,000 households.
Some programs would receive a modest increase in funding compared to FY24, including Homeless Assistance Grants ($4.06 billion, up by $9 million), Section 202 Housing for the Elderly ($931 million, up by $18 million), Section 811 Housing for Persons with Disabilities ($257 million, up by $49 million), Choice Neighborhoods ($140 million, up by $65 million), Policy Development & Research ($145.5 million, up by $27 million), and Healthy Homes ($350 million, up by $5 million). Other programs would receive level funding, including Housing for Persons with AIDs ($505 million), the HOME Investment Partnerships Program ($1.25 billion), Housing Counseling ($57.5 million), and Fair Housing programs ($86.4 million).
Public Housing, Tribal housing, and Community Development Block Grants (CDBG) would receive cuts in funding. Funding for the Public Housing Capital Fund would be cut by $98 million to $3.31 billion, while funding for the Operating Fund would be cut by $273 million to $5.23 billion. Funding for the Native American Housing Block Grant would be cut by $291 million to $820 million, and the CDBG program would receive a funding cut of $400 million for formula grants, bringing the total to $2.9 billion.
The release of the President’s budget request marks the official start of the FY25 appropriations cycle. In the coming months, the U.S. House of Representatives and Senate will start drafting their own FY25 spending proposals, including proposals for funding HUD’s affordable housing and homelessness programs. Congress must finalize this process and enact a final spending bill or enact a Continuing Resolution (CR) by October 1 when the new fiscal year starts, or it risks a government shutdown.
Take Action!
Congress needs to keep hearing from you about the importance of affordable housing and homelessness programs! Advocates should contact their members of Congress and urge them to support the highest level of funding possible for HUD’s affordable housing and homelessness programs in FY25, including significant funding for NLIHC’s top priorities:
- Full funding to renew all existing contracts for the Housing Choice Voucher (HCV) program and expand assistance to 20,000 more households.
- Full funding for public housing operations and repairs.
- Full funding for HUD’s Homeless Assistance Grants (HAG) program.
- Full funding for the Eviction Prevention Grant Program.
- At least $1.3 billion for Tribal housing programs, including $150 million for competitive funds targeted to tribes with the greatest needs.
Advocates can continue to engage their members of Congress by:
- Emailing or calling members’ offices to tell them about the importance of affordable housing, homelessness, and community development resources to you, your family, your community, or your work. You can use NLIHC’s Take Action page to look up your member offices or call/send an email directly!
- Using social media to amplify messages about the country’s affordable housing and homelessness crisis and the continued need for long-term solutions.
- Sharing stories of those directly impacted by homelessness and housing instability. Storytelling adds emotional weight to your message and can help lawmakers see how their policy decisions impact actual people. Learn about how to tell compelling stories with this resource.
National, state, local, tribal, and territorial organizations can also join over 2,200 organizations on CHCDF’s national letter calling on Congress to support the highest level of funding possible for affordable housing, homelessness, and community development resources in FY25.
Detailed Analysis
New Mandatory Funding
Outside of the appropriations process, the president’s budget request calls on Congress to enact $258 billion in investments to address the housing crisis through mandatory spending. Together, these measures would result in 2 million more affordable homes, according to the administration. Unfortunately, there is no meaningful opportunity to advance the proposal in a divided Congress this year.
This proposal includes expanding and reforming the Low-Income Housing Tax Credit, enacting the “Neighborhood Homes Investment Act,” doubling the contribution made by the Federal Home Loan Banks, and creating a new $20 billion competitive innovation fund to support the construction of rental homes, incentivize localities to reduce zoning and land use barriers that prevent housing from being built, and spur new models of construction. Moreover, President Biden’s proposal includes a one-time $7.5 billion investment using mandatory funding to preserve public housing and $7.5 billion in funding for new HUD Project-Based Rental Assistance (PBRA) contracts.
The President’s budget request aims to ensure rental assistance is universally available to all extremely low-income veterans and youth aging out of foster care through increased mandatory funding – a step towards universal rental assistance for all households in need. To prevent and reduce homelessness, the budget request proposes $8 billion in mandatory funding to rapidly expand temporary and permanent housing strategies for people experiencing or at risk of homelessness through non-congregate shelter, interim housing, rapid rehousing, permanent supportive housing, and rental housing for extremely low-income households. The budget request proposes $3 billion in mandatory funding for emergency rental assistance and other eviction prevention and diversion measures and $3 billion to help communities prevent homelessness among older adults.
Moreover, the administration has outlined additional steps it will take to protect renters from egregious rent increases and other unfair practices that drive up rents, including banning misleading and hidden fees imposed on renters and directing federal agencies to stop illegal behavior by landlords, including anti-competitive, unfair, deceptive, or fraudulent business practices.
Tenant-Based Rental Assistance
President Biden’s budget request would increase funding for tenant-based rental assistance to $32.8 billion, including $29.25 billion to renew existing Housing Choice Voucher (HCV) contracts. The president’s budget assumes public housing agencies will use $963 million from reserves to help cover the cost to renew rental assistance for households currently receiving assistance in 2025. Even with this funding, advocates warn that this level of support may not be sufficient to renew all rental assistance contracts, and Congress may need to provide additional funding to prevent the loss of housing vouchers.
In addition, the budget includes $241 million for new incremental vouchers to serve an additional 20,000 households, including those who are experiencing or at risk of homelessness or fleeing or attempting to flee domestic violence, dating violence, sexual assault, stalking, or human trafficking.
Public Housing
The budget request calls for $3.3 billion for the Public Housing Capital Fund, a decrease of $98 million from FY24-enacted levels. The budget request was likely drafted and finalized before Congress completed its FY24 budget for HUD programs. This funding includes a $30 million set-aside for climate-related improvements to existing public housing stock. The Public Housing Operating account would receive $5.2 billion in FY25, a decrease of $273 million from the final FY24 bill.
Increased funding is required every year to provide housing agencies with additional resources needed to maintain services and make critical repairs that will improve living conditions for tens of thousands of residents. Our country’s public housing infrastructure currently has an estimated capital needs backlog of over $70 billion.
Homelessness
The president’s budget requests $4.06 billion for Homeless Assistance Grants, an increase of $9 million over the FY24-enacted level. HUD’s most recent Annual Homelessness Assessment Report showed a 12% increase in the number of people experiencing homelessness over the last year, revealing the need for resources to prevent and end homelessness is growing more urgent.
Eviction Prevention
The budget request does not specify whether it includes funding for HUD’s EPGP program, which provides communities with grants to establish and operate programs that provide legal representation for tenants facing eviction. Legal representation plays a crucial role in protecting tenants, and it can help households resolve a dispute and avoid eviction.
Native Housing
HUD’s Native American Housing programs would receive a $290 million decrease, to $820 million for FY25, under the budget request. HUD’s Native American Housing Block Grant program received an historic $1.1 billion in FY24, recognizing that generations of displacement and discrimination against Native people have resulted in tribal communities having some of the most dire affordable housing needs in the country. Many households live doubled-up – with more than one family residing in a single home – and a lack of infrastructure can make regular access to electricity and running water difficult.
Other Housing Programs
The bill would provide $931 million for the Section 202 Housing for the Elderly program, a slight increase of $18 million compared to FY24. This funding includes $115 million for grants for service coordinators. The bill also provides $257 million for the Section 811 Housing for People with Disabilities program, or $49 million more than FY24. Because the cost of housing rises every year, it is vital to provide these programs with increased funding from one year to the next to maintain the current level of services and the number of households being served.
The budget request proposes $505 million for the Housing Opportunities for Persons with AIDS (HOPWA) program, level funding from FY24 allocations.
The request would provide $2.9 billion in formula funding for the Community Development Block Grant (CDBG) program, a decrease of $400 million from formula grant funding provided in FY24. Of the amounts provided to CDBG, the budget requests up to $100 million for the Pathways to Removing Obstacles (PRO) Housing program, which will provide grants on a competitive basis to states, local governments, metropolitan planning organizations, and multi-jurisdictional entities for activities aimed at identifying and removing barriers to affordable housing production and preservation. Funding for CDBG includes a $30 million set-aside for the development of “recovery housing,” or temporary housing for people seeking treatment for substance use disorder. This funding does not include Community Project Funding, better known as “earmarks,” which made up almost half of the Community Development Fund in FY24.
The budget request does not include funding for the Preservation and Reinvestment Initiative for Community Enhancement (PRICE) program, which was funded at $10 million in FY24. Named in honor of former House THUD Subcommittee Chair David Price (D-NC), the program funds the preservation and revitalization of manufactured housing communities, including through the support of resident-owned cooperatives.
The president’s request calls for level funding from FY24-enacted levels for the HOME program, for a total of $1.25 billion in FY25.
The budget would provide $140 million for HUD’s Choice Neighborhood Initiative program, which helps communities revitalize assisted housing stock and make neighborhood improvements, including developing additional affordable housing stock. This is a $65 million increase from FY24.
Healthy Housing
The request calls for $350 million – a $5 million increase from FY24 levels – to reduce lead-based paint and other health hazards.
Fair Housing
The budget request would provide level funding for HUD’s Office of Fair Housing and Equal Opportunity, for a total of $86 million.
For more information, contact Sarah Saadian, Senior Vice President of Public Policy and Field Outreach, at [email protected], or Kim Johnson, Public Policy Manager, at [email protected]