Trump Proposes $26.7 Billion Cut to Housing Programs Affecting 3.8 Million; Judge Blocks Grant Restrictions as AmeriCorps Recipients Sue

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Updated May 8, 2025, 04:20 PM

The Trump administration has proposed substantial cuts to federal housing and community programs in its 2026 budget, including a roughly 43% reduction in funding for federal housing programs such as Section 8, amounting to $26.7 billion. This plan would replace existing programs with a State Rental Assistance Block Grant, shifting responsibility to states. Experts warn that these cuts could adversely affect approximately 3.8 million people, exacerbating the ongoing housing supply and affordability crisis, with California expected to be particularly impacted. Concurrently, the administration has targeted AmeriCorps for funding cuts, terminating about half of its programs that serve states and communities won by President Trump in the 2024 election.

In response, AmeriCorps grant recipients have filed lawsuits seeking to block these cuts. Additionally, a federal judge has temporarily blocked the Trump administration from imposing new conditions on transit and homelessness grants, ruling that the administration's conditions were unrelated to the grants and had not been approved by Congress. The judge also ruled against the administration's attempt to use the Pentagon to circumvent deportation restrictions.

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