WASHINGTON, D.C. – U.S. Senators Peter Welch (D-Vt.), Amy Klobuchar (D-Minn.), and Chris Van Hollen (D-Md.) urged the Trump Administration to drop its misguided plan to cut homebuilding tax credits in the midst of a housing crisis. The lawmakers urged the administration to reconsider its preliminary Fiscal Year (FY) 2026 budget request, which would completely eliminate funding for the Department of Housing and Urban Development’s (HUD) HOME Investment Partnership Program.
“Many households are contributing more than half of their income to rent, leaving less for other needs like health care, groceries, or saving for emergencies. For-profit developers also struggle to build entry-level or middle-income housing, resulting in a focus on high-end construction with units unaffordable to working families,” wrote the Senators. “Now is the time for strong federal support for HOME and the Housing Trust Fund to close financing gaps and build more homes.”
“Unfortunately, reports of unauthorized funding freezes and contract cancellations have raised concerns among housing investors about the stability of all of the federal funding sources in their projects’ capital stack, leading them to reconsider their investments. Decreasing or eliminating the funding sources that make LIHTC projects financially feasible will have detrimental impacts on rural communities’ ability to build more housing, especially when coupled with Fannie Mae’s newly restricted investment activity in this space,” the Senators continued.
The Senators concluded: “States are making efforts to speed housing construction through zoning reforms, permitting streamlining, innovative incentive structures, and housing equity programs. Unless the federal government provides consistent, flexible funding to close the financing gap for major projects, this progress will stall. With that in mind, we urge you to provide an FY26 Budget Request that furthers HUD’s mission to ensure safe and clean affordable housing and reinforce low-income housing tax credit investor confidence by advocating for reliable funding for HOME and the Housing Trust Fund.”
HOME and the Housing Trust Fund programs work in conjunction with the low-income housing tax credit (LIHTC) to fuel affordable housing construction across the country. The LIHTC has funded the construction of almost 2.75 million affordable housing units across the country. However, despite the proven efficacy of these programs, the federal government has underinvested in them for decades, resulting in a severe, nationwide shortage of affordable rental housing for working families.
Read the full text of the letter.
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