Episode 91: FY 2027 T-HUD Bill Clears Subcommittee

The House T-HUD Appropriations Subcommittee passed its FY 2027 HUD funding bill last week on a 9-7 party-line vote, and the full House Appropriations Committee is marking it up today. With a total HUD budget of $71.4 billion — $5.9 billion below FY 2026 enacted levels — the bill sets the opening position for a funding fight that will directly affect LIHTC deal stacks, voucher availability, and HOME gap financing across the country. Key Takeaways: Total HUD funding proposed at $71.4 billion, a $5.9 billion reduction from FY 2026 enacted levels. HOME funded at $500 million, down from $1.25 billion — a significant cut, but an improvement over FY 2026's starting position, when both the President's budget and the House bill proposed zeroing it out entirely. Tenant-based Section 8 at $38.083 billion, slightly below the $38.4 billion enacted in FY 2026 — a narrow but real gap for housing authorities already under pressure. Project-based Section 8 receives a $432 million increase over FY 2026 enacted levels, coming in at $18.975 billion — a positive signal for preservation and new construction pipelines. Choice Neighborhoods zeroed out again; Congress restored it at $25 million in FY 2026, but that outcome is not guaranteed to repeat. HOME, CDBG, public housing, and several other programs exempted from Build America, Buy America compliance for FY 2027 and prior years — a significant relief provision for deals where BABA has been slowing draws and closings. Continuum of Care funded at $3.778 billion, down $231 million from enacted levels, but the House rejected the administration's proposal to eliminate CoC and fold homeless assistance into ESG. Today's full committee markup is the next inflection point. The House bill is the floor of negotiations, not the ceiling — the Senate is expected to take a less aggressive posture on cuts, particularly for HOME and tenant-based vouchers. Developers and syndicators with HOME-dependent deal structures should model a wide range of outcomes. The BABA exemption provision, if it survives to enactment, would remove a material compliance barrier on HOME-funded closings. Watch for Senate appropriators' response and any floor amendments that could shift the HOME or voucher numbers before a final conference agreement takes shape. Subscribe to The Spring Street Brief for daily updates on affordable housing in America.