Proposed Federal Housing Cuts: What They’d Mean for Missouri Renters and Our Communities

If you’ve felt like rent keeps rising faster than paychecks, you’re not imagining it. Federal rental assistance—Housing Choice Vouchers (HCVs), public housing funding, homelessness programs, and key state and local tools like HOME and Community Development Block Grants (CDBG)—are the bedrock that help low-income Missourians stay housed, even as rent goes up.  

Right now, Washington is debating sweeping changes, including deep cuts, to these programs for fiscal year 2026 (FY26). This post breaks down what’s in play, how the proposals differ in the House and Senate, and what the ripple effects could be here in Missouri.

What’s Being Proposed

• White House plan: Over 40% cuts to HUD programs, turning much of today’s rental assistance into state-run block grants. Some adults could face time limits for receiving help.
  
• House plan: Cuts housing vouchers by about 2% (about $877 million nationally) and initially suggested eliminating the HOME program. Funding for fair housing enforcement would also drop. Advocates say this wouldn’t even cover all current voucher renewals.
  
• Senate plan: Keeps HOME funding the same as last year, maintains fair housing budgets, and avoids the steepest cuts — but doesn’t add much new funding.
  

Bottom line: the House is pushing harder toward cuts and restructuring; the Senate is trying to avert the worst reductions. Advocacy groups caution that any significant voucher shortfall or HOME/CDBG cuts would quickly translate into fewer families served and fewer affordable units built or preserved.  

You can find a more detailed breakdown of the House and Senate funding proposals at this link.  

Missouri’s Housing Reality

• Housing choice vouchers (HCV): Missouri’s public housing agencies (PHAs) administer thousands of vouchers. Kansas City alone manages about 10,000, and waitlists are often long—or closed entirely. In 2025, the Mid-Missouri Public Housing Agency and Columbia Housing Authority  have recently closed their HCV waitlists after reaching maximum capacity.
• Payment standards: Voucher payment limits are tied to HUD’s Fair Market Rents (FMRs) — calculated based on the number of bedrooms and adjusted annually based on rent inflation. However, a combination of increased rent and flat federal funding makes it harder to meet the increased need for rental assistance, maintain payment standards to be in line with market rents—leading to decreases in landlord participation.
• Homelessness trends: Missouri’s Continuums of Care report rising need. The 2024 Point-in-Time count in Kansas City showed sustained unsheltered homelessness, while rural areas report increases across 101 counties.
• Development tools (HOME & CDBG): HOME supports building and preserving affordable housing; CDBG funds rehab and neighborhood improvements. The Missouri Housing Development Commission (MHDC) depends on these to fill gaps in affordable housing deals. Cuts would slow construction and preservation statewide.
• Rural housing: USDA programs like Section 521 rental assistance and Section 515 rural rental housing are vital in small towns. The Senate’s FY26 plan keeps Section 521 flat but cuts new Section 515 construction loans to $50M nationally, limiting future rural supply.

Who Gets Hit First If Cuts Pass

1. Families with vouchers: An estimated 149,000 Missouri households received HCVs in 2023. Funding shortfalls would force PHAs to freeze new vouchers, revoke those in search, or raise tenant rent shares. CBPP estimates the House voucher budget is at least $3.7B short of covering current households covered by federally funded housing vouchers nationally.
2. Seniors, people with disabilities, veterans: Time limits or cuts would push vulnerable tenants toward rent shocks and possible homelessness. In 2024, veteran homelessness saw a 7.5% decrease, – a record low – due to increased funding and support to evidenced-based programs, such as permanent supportive housing. Cuts to these programs would setback the progress made and increase homelessness among this population again. 
3. Survivors of domestic violence and families with children: Block grants and time limits could reduce stability, especially for households already in crisis.
4. Rural renters and small landlords: USDA rental assistance keeps rural units viable. Cuts mean fewer affordable options in areas with no backups.
5. Builders and rehabbers: Losing HOME or CDBG funding slows projects, reduces preservation, and costs construction jobs.
   

What to Watch Next

• FY26 negotiations: If the Senate’s higher funding levels prevail, Missouri may avoid the worst disruptions. If the House version wins, expect voucher freezes, reduced fair housing enforcement, and slower development pipelines.
  
• Block grant proposals: Even a partial shift could leave Missouri scrambling to build new systems while serving fewer households.
  
• Rural housing funding: Section 521’s stability is crucial for rural  tenants, but cuts to Section 515 mean less future supply.
  
• Pipeline health: Watch MHDC’s HOME and CDBG allocations for signs of slowed rehab and preservation.
  

What Missouri Can Do Now

• Target resources where they’ll do the most good, based on data. Use HUD dashboards and homelessness counts to direct help where voucher utilization is lowest.
  
• Protect rural housing stock.  Prioritize maintenance and preservation programs where new construction funds are limited.
  
• Increase funding to Missouri Housing Trust Fund (MHTF). The MHTF is a state-level program that provides funding for programs and projects that increase housing security and decrease homelessness in Missouri. Currently, the MHTF is severely underfunded, leading to 75% of applications to be denied. Learn more about the MHTF and show your support for increased funding by signing our letter HERE. 

Bottom Line for Missouri

If the Senate’s budget wins out, Missouri could see level funding for HOME and enough voucher money to prevent mass disruptions—still tight, but manageable. If the House’s deeper cuts and restructuring pass, expect fewer renewed vouchers, longer waitlist closures, and a slower development pipeline.

And it’s not just rent – Congress is proposing cuts to the Low-Income Home Energy Assistance Program (LIHEAP). LIHEAP provides critical assistance with utility bills for lower-income households. With many leases requiring tenants to be current on their utility bills or face lease violations or evictions, this can impact housing security for many households in Missouri. With Missouri predicted to see the largest increase in utility rates, cutting this vital program will put low-income households at risk of losing their housing, even if they are able to pay their rent each month. You can join us in telling Congress to protect LIHEAP funding by signing on to our letter HERE.

Missouri’s choice isn’t whether to spend on housing—it’s whether to invest wisely now or pay more later in emergency services, health care, and lost economic mobility.