The Trump administration plans to rescind $56 million in HUD housing counseling grants, nearly all of the funding Congress appropriated for the program in fiscal year 2025. HUD is set to miss Wednesday, September 30's deadline for congressionally allocated payments to affordable housing organizations, putting support for nonprofits nationwide at risk.
Molly Wasow Park, president and CEO of the nonprofit NYC Housing Partnership, says the loss could make it harder for moderate-income households to navigate mortgage qualification and access assistance for down payments and closing costs. As reported by the New York Real Estate Journal, counseling can also be a prerequisite for some of those programs. Trump has complained that the program supported DEI initiatives he opposed.
A Program With Numbers to Show For It
The NYC Housing Partnership says more than 400 New Yorkers who completed its first-time homebuyer counseling program went on to buy their first homes. The organization reports that those buyers qualified for more than $5 million in financial support for down payments and closing costs.
Nationally, HUD grants helped almost 35,000 families become homeowners as of the latest available data from 2024, and not-for-profit organizations across the country provide one-on-one counseling to more than 250,000 households annually. The NYC Housing Partnership itself has operated for more than 40 years, working with community partners, lenders, developers, and public agencies to create and preserve 100,000 low- and moderate-income housing units while leveraging over $11.1 billion in private financing and more than $550 million in subsidies for affordable housing.
Homebuyer Assistance and Access in New York City
The New York City Comptroller’s Office reports that the city’s homeownership rate is 30%, compared with a nationwide average of 66%. Separately, PIX11, republished by Yahoo Lifestyle, reported that applicants to the city’s HomeFirst down-payment assistance program must take a first-time-homeownership course through a counseling agency partnered with HPD.
How the Cut Was Executed
According to the National Low Income Housing Coalition, the $56 million rescinded represents almost the entirety of the $58 million Congress originally appropriated for HUD housing counseling grants in fiscal year 2025. The organization notes Senate Appropriations Committee Chair Susan Collins denounced the move as an intentional withholding of funds that had been approved on a bipartisan basis.
The administration used a procedural tool known as a pocket rescission, submitting the proposal under the Impoundment Control Act of 1974 just five days before the fiscal year deadline. The timing meant unspent funds could expire before Congress completed its statutory 45-day review, as detailed by Rolling Out. The Government Accountability Office maintains that late-year pocket rescissions of this kind violate Congress's constitutional spending powers, according to the same report. In a separate federal funding action, TIME reported that Trump requested cancellation of $4.9 billion in congressionally approved foreign-aid funds on Aug. 28, 2025, including $3.2 billion allocated to USAID; that request involved a different funding category from HUD housing counseling. The current cut was part of a broader $810 million pocket rescission package targeting 11 funding streams, including $567 million pulled from Department of Health and Human Services non-citizen assistance programs and $86 million total from civil rights initiatives, Rolling Out reported. Hoodline covered the wider package in Trump Cancels Nearly $1B in Congress-Approved Funding.
Legal Pushback Already Underway
This is not the administration's first run-in with the courts over HUD grant conditions tied to its DEI executive orders. The U.S. District Court for the District of Rhode Island ruled on August 14, 2026 to vacate HUD and Department of Health and Human Services grant conditions linked to those orders, finding the agencies had acted arbitrarily without considering grantee reliance on the funds, according to Wiley Law. A separate federal judge in Rhode Island set aside HUD's 2026 Notice of Funding Opportunity over the agency's $1.3 billion set-aside without public notice and comment, as reported by Davis Vanguard.
The National Fair Housing Alliance has raised concerns about executive orders and fair-housing protections, according to Shelterforce.
Park, president and CEO of the NYC Housing Partnership, frames the loss of counseling grants as a direct blow to moderate-income buyers navigating a restrictive mortgage market, as the New York Real Estate Journal reported. Her organization has said it will continue striving to keep safe and comfortable housing within reach for New Yorkers, even as the federal support underpinning that work grows less certain.
