The U.S. Department of Housing and Urban Development cut nearly $56 million in housing counseling funding that Congress had already allocated, prompting a lawsuit from nonprofit organizations. The funding was rescinded on Sept. 25, just before the end of the federal fiscal year, sending the money back to the Treasury. Ten nonprofits filed suit on Sept. 29, claiming the cuts were an unlawful rescission meant to punish grantees for their speech. A federal judge temporarily paused the cuts on Sept. 30.
HUD Defends Funding Cuts as Policy Alignment
HUD spokesperson stated the rescission falls under the Impoundment Control Act, allowing the President to ensure the faithful execution of the law. The department emphasized its responsibility to deploy taxpayer funds in line with the administration’s policy agenda. The funding cut represents most of the $58 million Congress allocated for housing counseling, with the remaining funds still available for distribution.
Consumer Federation of America Director of Housing Sharon Cornelissen called the cuts an abandonment of families facing rising housing costs. The lawsuit alleges the Trump administration targeted grantees for their past speech unrelated to grant activities.
Senate Bill Proposes Down Payment Match for First-Time Buyers
A separate legislative effort seeks to address homeownership barriers through a federal down payment matching program. Oregon Senator Jeff Merkley introduced the Homeownership Promise Act last week, with co-sponsor Sen. Ron Wyden. The bill would provide a $5 match for every $1 a first-time buyer saves, up to $50,000 in matched funds.
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Merkley argued the program would restore homeownership as a foundation for middle-class families. The legislation aims to make homeownership more accessible for young Americans who face increasing financial hurdles. The bill would restore the promise of homeownership, one of the foundations that working families need to thrive, by allowing all Americans to save for a home and live that piece of the American Dream, he added.
The National Association of Home Builders (NAHB) is supporting a new bill introduced this week in the U.S. Senate. The Bipartisan American Affordability and Jobs Act of 2026 aims to amend the federal government’s processes for environmental review and permitting, changes that lawmakers who support the bill say would “deliver cheaper energy, more jobs, and responsible growth” across the country.
The legislation would bring about the “most meaningful reforms in decades to several key federal environmental permitting programs,” NAHB Chairman Bill Owens said in a statement, adding, “The housing sector stands to benefit from many of these federal permitting reforms.”
