The National Housing Conference (NHC) is warning in a newly published brief that President Donald Trump’s proposed budget cuts would seriously harm efforts to build more affordable housing across the country.
Congress‘s newly passed “One Big Beautiful Bill” makes major investments in affordable housing. These include an expansion of the Low-Income Housing Tax Credit (LIHTC) program, permanent new markets and mortgage interest tax credits, reinstated mortgage insurance deductions and a stronger, permanent incentive for Opportunity Zones.
But at the same time, the House has proposed the elimination of funding for the HOME Investment Partnerships Program in fiscal year 2026. HOME, which many local governments rely on to build and fix up affordable homes, also helps people buy their first homes and provides rental assistance.
Housing and job generator
The brief, authored by NHC president and CEO David Dworkin, said the cut would undo much of the good that’s supposed to come from the Big Beautiful Bill. HOME often fills financial gaps in housing projects and is the only flexible federal program that lets cities and states decide how to meet their local housing needs. It also helps generate other funding from private and public sources.
“Since the program’s inception in 1992, HOME funds have been used to build or preserve more than 1.35 million affordable homes, provide direct rental assistance to 430,000 households, and help countless working families buy their first home,” according to the brief, citing a document published early this year by the U.S. Department of Housing and Urban Development (HUD).
According to the latest HOME Coalition analysis, the program has generated more than $140 billion in local income and created upward of 2 million jobs.
At the state level, HOME has allowed Mississippi to build or preserve more than 11,000 homes, support some 18,500 local jobs and generate $1.2 billion in income. In Arkansas, NHC said that more than 15,000 homes have been built or preserved as a result of HOME.
Some lawmakers in the House Committee on Appropriations claim a temporary COVID-era program called HOME-ARP can replace the funds allocated to HOME. But Dworkin argues that’s not true — HOME-ARP is limited, temporary and can’t be used for many of the same purposes.
The brief urges Congress to restore at least $1.5 billion for the HOME program in the next federal budget. Without it, NHC warns, many affordable housing projects will stall, costs will rise and the housing crisis will get worse — especially for renters, seniors and first-time homebuyers.
In an interview with HousingWire, Dworkin emphasized bipartisan support for affordable housing and criticized Trump‘s budget for zeroing out the program, arguing that the cuts will exacerbate homelessness.
“if you believe that the government shouldn’t be making any investment in housing … you’re going to end up with a lot less affordable housing and more homeless people as a result, because the market is incapable of doing what the HOME program does, and what the HOME program, in fact, has been very effective at doing,” Dworkin said.
Too costly and political
Naysayers argue that HOME and other housing programs aren’t as effective as they claim to be.
Edward Pinto, a senior fellow and co-director of the American Enterprise Institute (AEI) Housing Center, argues that HOME is too costly and is a “negative burden” on the housing market.
“They’re just sources of money for lobbyists to organize themselves as a cartel. If you look at the groups of developers and nonprofits that are involved in this financially, it’s a very small group versus the total group of developers,” Pinto told HousingWire.
“There are thousands and thousands of builders and developers, [but] a small fraction get involved in these programs. Why? Because of the complexity and the cost and all the other things. They also tend to be corrupt,” Pinto said.
He went on to argue that private developers are often “crowded out” by subsidized housing projects, which take up available land. AEI research, he added, “shows that top-down programs, centralized programs, haven’t worked in the United States.”
Pinto argues that a top-down approach to housing issues puts politicians in the driver’s seat of deciding which areas have the greatest level of needs, rather than boots-on-the-ground business leaders. Lawmakers, he said, tend to pick areas based on personal interests.
“The only thing worse than subsidized housing is having the winners and losers picked by politicians,” he said.
Pinto’s solution is this: “You need to allow smaller lots — both for new residential subdivisions and in the reuse of existing lots that already have a structure on them. Allow that structure to be torn down, replaced by three or four townhomes or whatever sits on the lot, and you will both get a lot more housing. That housing will sell for a lot lower price than other new housing that’s built on a larger lot.”
Dworkin believes it’s not worth throwing away the HOME program, but reform is needed within the program itself. Democrats and Republicans need to be on the same page about housing policy to accomplish this, he said.
“The committees need to be more aligned. … We have bipartisan support for these programs because we’ve seen a lack of affordable housing throughout the entire country, in red states as well as blue ones,” he said. “[HOME] can absolutely be more effective. There’s no question that there is bureaucracy associated with HOME that needs to be improved.
“There are needs that a healthy market is not going to meet, and that’s where government steps in to close that gap.”