President Donald Trump delivered his first budget proposal of his second term Friday, asking Congress to dismantle funding for several low-income housing programs and reshape the Section 8 housing voucher program.

The Department of Housing and Urban Development would face some $32.9B in cuts under the proposed budget, amounting to the department losing roughly 44% of its funding.

The cuts reduce the department's total funding from $77B to $43.5B. Around $26.7B of the cuts come from funding for rental assistance programs, the White House’s budget proposal shows.

The Trump administration wants to shift federal rental assistance like Section 8 housing vouchers from federally administered programs to state-based grants, arguing that the move would allow states to tailor rental assistance programs to the needs of their inhabitants and incentivize private investment into affordable housing.

Overall, the budget calls for cutting the rental assistance programs by nearly $27B.

The National Association of Housing and Redevelopment Officials strongly opposed the proposal, saying it would “have a devastating impact on millions of families across the country.” It said changing the rental assistance programs to grant funding would make the proposal more vulnerable to cuts in the future.

The White House also called for capping rental assistance for able-bodied adults to two years, which the budget proposal said would “ensure a majority of rental assistance funding through States would go to the elderly and disabled.”

The budget would cull federal bloat while “requiring states and localities to have skin in the game,” HUD Secretary Scott Turner said in a statement Friday.

“President Trump’s bold budget proposes a reimagining of how the federal government addresses affordable housing and community development,” he said. “It rightfully provides states and localities greater flexibility while thoughtfully consolidating, streamlining, and simplifying existing programs to serve the American people at the highest standard.”

Trump also proposed cutting $3.3B from the Community Development Block Grant program, eliminating the program altogether. The Trump administration says those federal dollars go to projects like “improvement projects at a brewery, a plaza for concerts, and skateboard parks” that should be funded at state and local levels.

The budget also calls for the eradication of the HOME Investment Partnerships Program, which provides federal funding to states and local governments specifically to expand their supply of low-income housing.

While the cuts would be drastic, Trump also made similar proposals during his first term as president that failed to materialize, The Real Deal reported.

Affordable housing advocacy groups decried the proposal. In New York state, more than one million people were beneficiaries of federal rental assistance that helped keep them housed in 2023, according to progressive think tank Center for Budget and Policy Priorities.

New York nonprofit Association for Neighborhood and Housing Development said the cuts would “exacerbate our already overwhelming housing and homelessness crisis,” while shelter and supportive housing group Win called the proposal “cruel” and “dangerous.”

Rachel Fee, executive director of the New York Housing Conference, called the cuts “inhumane and devastating.”

“The impact will be felt across the nation, from families that rely on Section 8 to seniors and people with disabilities who face losing stable, supportive housing,” she said in a statement. “This plan will drive more people into homelessness, especially in places like New York.”

The budget is just the latest move Trump has made to reshape the U.S. housing safety net. His administration has already canceled or paused grant funding to housing nonprofits, and Trump issued an executive order calling for the elimination of community development financial institutions, which finance development in low-income communities.