HUD sued over ‘unlawful’ funding cuts; Dems pitch down payment help 

This week in Washington, D.C., a collection of nonprofits sued HUD after the department canceled millions in funding for housing counseling.

Meanwhile, homebuilding advocates applauded the introduction of new affordability legislation in Congress, and another bill targeting the barriers to homeownership proposes the creation of a federally funded down payment match program to help first-time buyers get their foot in the door.

HUD cuts nearly $56M in allocated funding

Nonprofit organizations sued HUD this week over last-minute grant funding cuts totaling nearly $56 million, representing the bulk of the $58 million that was previously allocated by Congress to support housing counseling. The funds were rescinded on Sept. 25, shortly before the end of the federal government's fiscal year — a move that, in theory, sends the money back to the U.S. Treasury.

But the cuts are an "unlawful rescission of funds," according to a statement from Consumer Federation of America Director of Housing Sharon Cornelissen. "By withdrawing these funds, the Administration is abandoning American families struggling with escalating housing costs."

Ten nonprofits filed a lawsuit on Sept. 29, alleging that the cuts represent the Trump administration's efforts "to punish grantees for their past speech and viewpoint on topics that have nothing to do with grant activities."

A federal judge temporarily paused the funding cuts on Sept. 30.

"Under the authority granted in the Impoundment Control Act, this rescission enables the President to carry out his constitutional responsibility to ensure the faithful execution of the law," a HUD spokesperson said in a statement to Real Estate News. "HUD is entrusted to ensure that taxpayer funds be deployed in alignment with the President's policy agenda."

Housing 'stands to benefit' from affordability legislation, NAHB says

The National Association of Home Builders (NAHB) is supporting a new bill introduced this week in the U.S. Senate. The Bipartisan American Affordability and Jobs Act of 2026 aims to amend the federal government's processes for environmental review and permitting, changes that lawmakers who support the bill say would "deliver cheaper energy, more jobs, and responsible growth" across the country.

The legislation would bring about the "most meaningful reforms in decades to several key federal environmental permitting programs," NAHB Chairman Bill Owens said in a statement, adding, "The housing sector stands to benefit from many of these federal permitting reforms."

"These provisions provide the industry with needed clarity and consistency during the federal permitting process," Owens said.

Senators pitch down payment match program for first-time buyers

Last week, Oregon Senator Jeff Merkley introduced a bill that proposes the creation of a federal government match program intended to help aspiring homeowners. Sen. Ron Wyden, a fellow Oregon Democrat, co-sponsored the bill.

If passed, the U.S. government would pitch in $5 for every $1 a first-time buyer sets aside for a down payment, with the matched funds topping out at $50,000.

"For millions of young Americans, homeownership remains further out of reach than ever before, keeping them from establishing the foundation that has enabled middle-class families to build equity for generations," Merkley said in a news release.

The bill, dubbed the Homeownership Promise Act, "would restore the promise of homeownership — one of the foundations that working families need to thrive — by allowing all Americans to save for a home and live that piece of the American Dream," he added.

Editor's note: This story has been updated to include a statement from a HUD spokesperson.