President Trump’s fiscal 2027 federal budget outline, released on April 3, 2026, proposes to fund most of the U.S. Department of Agriculture’s (USDA) rural housing programs. But the budget also proposes severe cuts to U.S. Department of Housing and Urban Development (HUD) and other important programs that serve low- and moderate-income people in rural America.
Many of the cuts were also proposed last year in the Trump administration’s budget for fiscal year 2026. Congress did not adopt most of those cuts and may not again this year. This budget is an improvement on Trump’s USDA rural housing budget for FY 2026, which proposed deep cuts.
That budget proposed, for example, cutting the USDA’s Section 502 home ownership program entirely. For 2027, the Trump proposal is to fund that program with $983 million.
The proposed budget would also increase the defense budget spending to an unprecedented $1.5 trillion. This would be a stunning 42% increase over the 2026 defense budget.
In the next few weeks, Congress will begin making decisions on these proposals. The new fiscal year starts on October 1, 2026, but a final budget is usually not in place by that date.
Several examples of the other proposed cuts can be found below:
The Community Development Financial Institutions Fund (CDFI): The Treasury Department’s Community Development Financial Institutions Fund, created by Congress in 1993, supports mostly small nonprofit loan funds that help finance small businesses, housing, and other anti-poverty projects. About 25 to 30% of the nation’s CDFIs are rural.
As in President Trump’s 2026 proposal, his 2027 budget would eliminate almost two-thirds of the funding for this $324 million program. $100 million would be converted into a new Rural Financial Assistance Program. CDFI fund staff would also be cut from 76 to 27.
HUD programs: Despite its name, the U.S. Department of Housing and Urban Development is a vital source of funding for rural areas and suburbs as well as cities. The Trump 2027 budget would provide zero funds for Community Development Block Grants and the HOME program, cutting $3.3 billion from CDBG and $1.25 billion from HOME. Both programs are among HUD’s most important and flexible initiatives and are used extensively in rural areas and small cities.
Energy assistance: The Low-Income Home Energy Assistance Program (LIHEAP) would also be zeroed out in 2027. It received $4 billion in FY 2026 to help low-income households with their energy bills. This is the sixth time President Trump’s budgets have proposed ending this Health and Human Services (HHS) program.
Community Services Block Grant (CSBG): Also for the sixth time in a Trump budget, this program would be eliminated. It has funded many rural and urban anti-poverty Community Action Agencies, starting in the 1960s.
Sources for this article and excellent resources overall include the Housing Assistance Council (ruralhome.org), the National Low-Income Housing Coalition (nlihc.org), and Shelterforce (shelterforce.org).
The post Trump’s 2027 Budget Proposes Deep Cuts Across Federal Agencies, Restores Some Rural-Focused USDA Housing Funds appeared first on The Daily Yonder.
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