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Housing supply and affordability has become one of the most important issues facing the country. The United States faces a shortfall of 3.85 million homes and more than 42 million American households are cost burdened. When the Trump Administration began, there were several indications that increasing housing supply would be a priority for the administration. On day one of the new administration, President Trump signed an executive order instructing his administration to “lower the cost of housing and expand housing supply.” Secretary of Housing and Urban Development (HUD) Scott Turner echoed this priority during his confirmation hearing, noting repeatedly that increasing the supply of housing should be a department priority, a sentiment shared by nearly every Republican and Democratic member of the Senate Banking Committee.  

However, the Department of Government Efficiency (DOGE) recently proposed staffing reductions at HUD that will preempt the Administration from achieving its housing supply goals. These cuts risk market-moving effects on housing supply and will severely impair the HUD’s ability to perform its congressionally mandated functions. We urge DOGE and the Administration to reevaluate the proposed actions to ensure that housing development and preservation can advance and escalate.  

Proposed cuts at HUD risk the following supply-positive programs: 

Federal Housing Administration (FHA)  

The FHA provides mortgage insurance via approved lenders to facilitate the construction, rehabilitation, repair, refinancing, and purchase of single-family homes and multifamily properties. In FY 2024, it insured more than 498,000 first-time homebuyers, and FHA activities also generate billions of dollars in annual revenue through negative credit subsidies. 

Proposed reductions would curtail FHA’s ability to originate loan guarantees and manage assets. Without the ability to process and issue mortgage insurance in a timely fashion, lenders will decline to participate in FHA lending, crippling the residential construction industry as multifamily developers struggle to find options for debt financing and prospective homeowners find their home mortgage options increasingly limited.  

Further, the effects would have a disproportionate impact on working class families. FHA mortgages are often the debt products of “last resort” for borrowers whose credit scores or loan-to-value ratios disqualify them from more conventional options.  

Community Planning and Development (CPD) 

The office of Community Planning and Development oversees the HOME Investment Partnerships Program (HOME) and Community Development Block Grant (CDBG) programs, which provide critical resources to more than 1,500 local communities across fifty states to implement pro-housing supply policies.

The HOME program supports localities with highly leveraged seed funding to rehabilitate and construct affordable housing. The CDBG program provides resources for local governments to remove regulatory barriers and expedite approvals for new housing development. The most recent round of CDBG-PRO Homes funding was over-subscribed 13:1, with HUD allocating $1 for every $10 in funding requested. This signals a strong local desire to undergo regulatory reform to support housing growth. 

Absent proper administration of these successful, highly in-demand programs, local governments will have few options to expand housing supply, and housing developers will be unable to access the low-income housing tax credits or private financing essential to build more homes.  

Policy Development and Research (PD&R) 

The work of the office of Policy Development and Research (PD&R) sets the basis for effective administration of the most impactful federal housing supply programs which provide thousands of new, affordable homes each year. 

The office of PD&R establishes Area Median Income (AMIs), measures essential to the effective administration of the Low-Income Housing Tax Credit Program, a critical supply program administered by the U.S. Treasury. Similarly, PD&R collects and analyzes data to establish Fair Market Rents (FMRs) which are required to ensure property owners receive adequate resources to maintain and rent residential properties. FMRs are also essential to support the development of new affordable housing through Project Based Vouchers.  

Staff at PD&R also support the FHA’s mortgage underwriting processes and actuarial studies as well as providing policy support and research highlighting best practices for local, state, and federal efforts to address the country’s housing shortage.  

Under the DOGE proposed reductions, PD&R would effectively cease to function.  

Office of Multifamily Housing Programs (OMH)  

The Office of Multifamily Housing (OMH) Programs administers the Department’s Project Based Rental Assistance programs that maintain and expand the nation’s housing stock for aging and disabled populations.  

These programs include initiatives to fund housing for people with disabilities (Section 811) and supportive housing for the elderly (Section 202). OMH also administers the Department’s Project Based Rental Assistance programs, which provide critical sources of stable financing for affordable housing projects. 

DOGE’s proposed cuts will reduce access to these vital supply-focused programs and leave thousands of people with few options to access the housing they rely on to survive.  

Key Takeaways

This selection of offices and programs are but a few of the targets of DOGE’s proposed reductions. Many more proposals could impair the ability of millions of hard-working people to find affordable homes.  

We understand the need to strive for a more efficient and effective federal government. However, those efforts should not come at the expense of the housing market’s ability to facilitate adequate housing production. We urge the Administration and DOGE to collaborate with housing experts who can help align HUD’s activities with the need for new housing supply. We stand ready to work with the Administration on identifying common sense, evidence backed approaches to increase the nation’s supply of housing and help more people thrive.  

About Up For Growth 

Up for Growth is a nonpartisan, non-profit group focused exclusively on advocating for federal policy to increase housing supply to improve the affordability and availability of housing. We work with Republicans and Democrats to identify, craft, and implement evidence-based policies that reduce barriers and lower costs to deliver new homes in all communities.