HUD is withholding funds despite court orders, while creating delays that are killing homebuilding projects, senators say

President Donald Trump’s administration wants to hack in half the budget for the US Department of Housing and Urban Development (HUD). But as it is, HUD is withholding previously awarded funds in violation of court orders, and staffing cuts have caused delays that are slowing or killing development projects, senators said during budget hearings last week. 

Streetlight reported in May that HUD had awarded Continuum of Care grants months earlier, but some recipients still hadn’t received agreements for the grants, which help communities address homelessness.

In May, a federal judge in Washington state blocked HUD from freezing the funds or canceling the grant agreements. But Sen. Patty Murray (D-Washington) said during a budget hearing last week that service providers in Washington have told her HUD still hasn’t provided the funding.

HUD Secretary Scott Turner said the agency is following the law and court order and declined to comment further, citing the pending litigation.

Last week, Turner said during Senate and House subcommittee hearings on HUD’s share of federal appropriations that the agency is increasing the nation’s housing stock. But Sen. Christopher Coons (D-Delaware) said he had met with Delaware homebuilders who were skeptical that working with HUD would create more housing. Because of HUD staff cuts affecting 2,300 employees, the senator said, project signoffs are hitting snags. 

“Their wait times have gone from months to projects not moving forward, falling apart,” Coons said.

Stalled funds are also affecting the Green and Resilient Retrofit Program, Murray said, a program created to fund upgrades to make privately owned HUD-subsidized housing more energy and climate resilient. HUD stopped funding the program in March and removed information about it from its site.

Murray said the Department of Government Efficiency had canceled an administrative contract related to the program, and HUD-assisted property owners told her that cancelation has prevented them from making upgrades to housing for low-income people and older adults. The improvements include installing fire-resistant roofs and replacing windows and outdated HVAC systems.

In April, a federal judge in Rhode Island ordered HUD to disperse funds for the program, but Murray said the agency hasn’t restored the contract. Turner wouldn’t answer why, citing the pending litigation.

“There are people waiting,” Murray said. “There are court orders. I expect them to be followed and I’m just going to say for the record, there is nothing objectionable about this funding. It’s stunning to me that we’re under a court order, and you’re not giving the money out.”

HUD spokesperson Kasey Lovett responded to an interview request but didn’t make agency staff available to answer questions. Lovett didn’t answer why withholding funds for the programs is acceptable, particularly given the court orders, and she didn’t answer why it’s acceptable for HUD to delay project approvals.

Spokespeople for Rep. Tom Cole (R-Oklahoma) and Sen. Susan Collins (R-Maine), who chair the House and Senate appropriations committees, didn’t respond to interview requests. They didn’t answer why it’s appropriate for HUD to withhold funds for the Continuum of Care and retrofit programs or why it’s appropriate for the agency to delay homebuilding project approvals.

Lawmakers question proposed cuts to housing development, homeownership programs and assistance for veterans

These issues came to light as HUD pitches a budget with cuts similar to those thrown at the agency during the 1980s, when HUD lost resources for housing assistance and development that it has never regained.

The Trump administration’s proposed budget for HUD would eliminate funding for assistance programs that help millions of Americans, including public housing and almost every type of housing voucher. And the budget would eliminate contracts and grants for services and housing development that nonprofits and for-profit businesses alike depend on financially.

This year, the Trump administration has made dramatic cuts across the federal government. For HUD, the cuts have resulted in a smaller workforce, canceled grants and contracts, along with funding delays.

[ Read more: For the first time since the 80s, the Census Bureau won’t conduct the biennial American Housing Survey this year ]

At times, the cuts defied federal law. For instance, federal law requires HUD to collect data featured in the American Housing Survey every other year, but HUD isn’t paying the Census Bureau to conduct the biennial survey this year.

Most members of the subcommittees were unreceptive to the proposed budget. Republicans’ concerns included eliminating funds for housing vouchers for veterans, homeownership programs and housing development. Members of both parties were worried about the idea of eliminating funds for housing assistance to older adults and people with disabilities.

“All you’re doing is cutting, and there’s not even a transition period,” Rep. Mike Quigley (D-Illinois) said. 

“We’re going to be more effective and more efficient,” Turner replied. “We’re not just cutting. It’s a new paradigm. It’s a new way to do things.”

Rep. James E. Clyburn (D-South Carolina) asked how the proposed cuts would make HUD more effective.

“This is whether or not we’re going to have a program to meet the needs of the American people or whether we’re going to just get rid of it and throw the baby out with the bathwater,” he said. “That’s what you seem to be doing here. (You want to) cut half of the budget and then you’re telling me you want to refocus the agency. With what? With what equipment?”

“We haven’t had the right equipment for the right situation,” Turner said, adding: “The right equipment is called transparency. It’s called inventory. It’s called, let’s refocus and let’s have a new paradigm.”

HUD’s proposed budget would replace funding for public housing and housing vouchers with a state rental assistance program at about half the cost

Housing affordability, development and homelessness are huge issues to many Americans. Housing costs have been rocketing upward for years, and record numbers of Americans can’t afford rent.

That’s triggered another record-breaking figure—for homelessness. Last year’s annual homelessness census found more than 770,000 Americans were experiencing homelessness.

“You know housing affordability and homelessness is a crisis in Washington state and in many places across the country,” Murray said. “But this administration just appears to me to be trying to make it all worse, and I’ll tell you right now, looking at your budget request, as far as I’m concerned as vice chair of this committee, it’s not going anywhere.”

[ Read more: Some Grants Pass, Oregon councilors want unsheltered people to get sober before they get help, but waitlists limit access to treatment ]

Trump’s proposed budget for HUD asks Congress for $43.5 billion in the 2026 fiscal year, a 51% cut from the current fiscal year’s $89.1 billion allocation to the agency.

To get there, HUD proposes eliminating funding for public housing and housing choice vouchers, including those for veterans.

Also up for elimination: rental assistance and HUD contracts tied to privately owned multifamily properties, including those that exclusively serve older adults and renters with disabilities.

On top of that, the budget proposal would eliminate funding for housing inspections of HUD-assisted properties, which are in place to ensure housing that HUD subsidizes is safe for residents.

Combined, those programs received allocations totaling about $63 billion in the current fiscal year, HUD records show.

The Trump administration’s budget proposes replacing those programs with $36.2 billion to provide grants to states to create their own rent assistance programs. HUD would require state grantees to prioritize older adults and renters with disabilities, and for all other renters, create a two-year limit for assistance. 

Asked how the agency would ensure adequate service levels, especially for older adults and people with disabilities, Turner said HUD’s policy development and research office would “make sure that we work with states to implement an appropriate strategy” and “that this strategy is serving the most vulnerable in our country.”

HUD’s proposed budget would cut the research office from this fiscal year’s $139 million allocation to $95 million, which includes a $20 million proposed cut to eviction prevention grants.

Trump administration proposes rolling Continuum of Care funds into the Emergency Solutions Grant program

HUD’s spending proposal calls for eliminating $3.5 billion in funding for the Continuum of Care program, plus about $269 million for youth homelessness, new permanent supportive housing, programs that serve domestic violence survivors and a data analysis project.

Funding for those programs would be absorbed by HUD’s emergency solutions block grant program, for which the proposed budget earmarks $4 billion, up from $290 million.

The proposal says the idea “reflects a move toward a more agile, locally-oriented approach that emphasizes self-sufficiency, rapid stabilization and emergency, short and medium-term housing solutions over long-term service dependency.”

The Emergency Solutions Grant program funds homelessness prevention, outreach, rapid rehousing, emergency shelter and rental assistance. Under HUD’s plan, the grants would be expanded to include short and medium-term supportive services and transitional housing. 

The budget also proposes eliminating $15.4 billion in funding for HUD’s community development fund, including $3.3 billion in Community Development Block Grants that many communities use to fight homelessness and increase their affordable housing supply.

[ Read more: HUD employees face high stress levels and lower productivity ]

Rep. Steve Womack (R-Arkansas), who chairs the House subcommittee that oversees appropriations to HUD, said the proposed cuts would radically affect HUD’s mission and operations.

“Your proposal is light on details on how the formula for your proposed state rental assistance program would ultimately work,” he said. “I’m also curious how HUD will support community development in low and moderate-income communities when some of its most important and popular programs, like Community Development Block Grants, have been zeroed out.”

The budget also would eliminate $505 million for the Housing Opportunities for Persons with AIDS program, (HOPWA) which addresses housing needs of low-income people with HIV who are experiencing or at risk of homelessness. HUD’s proposal says those renters “may be served” under the consolidated Emergency Solutions Grant program.

Quigley said many people receiving assistance through the program “aren’t short-term folks. Two years isn’t enough for them.”

“What’s the detailed plan that says those folks won’t go out on the street, where they won’t get their medication and they’ll die?” Quigley asked.

Turner said: “As a Christian, as a pastor, I care about all people, and when you talk about HOPWA and the Emergency Solutions Grants, this will help us to better serve people in a community.”

HUD’s “new paradigm”: State and local governments pay for housing assistance and development instead

The Trump administration’s budget acknowledges the cuts would require states, local governments, nonprofits and businesses to play a “greater role” in addressing housing affordability and community development.

[ Read more: Fannie Mae fired more than 100 employees for ethics violations but won’t answer basic questions about their alleged misconduct ]

Several subcommittee members pointed out that proposed sea change would happen just as the Trump administration is shifting other costs, from health care to food assistance, to states, cities and counties.

“To also move housing affordability for seniors,” Coons said, “for the disabled and families with children (to states and counties) goes beyond streamlining HUD’s services, but leads to fewer people receiving services.”

Asked if he believed states and local governments could pick up those costs, Turner said: “We have to do something different because what we have been doing over these many years has not been working. … This is a different way of looking at things. It’s a rethinking of, how can we get states to have skin in the game?”

Contact Streetlight editor Mollie Bryant at 405-990-0988 or bryant@streetlightnews.org. Follow her reporting on Bluesky or by joining our newsletter.

Streetlight is a nonprofit news site based in Oklahoma City. Our mission is to report stories that envision a more equitable world and energize our readers to improve their communities. Donate to support our journalism here.