By Marissa Ramirez and Andres Matos 

President Trump released his budget request for Fiscal Year 2027 on Friday, April 3rd, outlining his Administration’s funding priorities for the upcoming year. This is an important signal of the Administration’s priorities regarding investments in community financing, small businesses, affordable housing, rural development, and more. While the budget request is an important document, it is not the final say in federal funding. Congress will ultimately decide how much money programs receive through the federal appropriations process.  

What is a presidential budget request? 

Each year, the President submits a budget request to Congress detailing the Administration’s aspirations for how the federal government spends its money in the upcoming fiscal year, which begins on October 1. The budget includes recommended funding levels for federal departments and agencies, policy priorities, and, in many cases, proposals to expand, reduce, restructure, or eliminate specific programs. In short, this is the Administration’s opening bid.  

It serves a few purposes, including signaling the President’s overall funding priorities and letting Congress know what the Administration would like to see in their funding packages. Importantly, the President does not dictate federal funding levels, so this document is akin to a wish list to Congress, who ultimately decide how to appropriate federal funds.  

What is Congress’s role in federal appropriations? 

Congress holds the power of the purse, meaning they may choose to accept some of the President’s budget requests, or reject some or all of them. In the coming months, appropriations committees in the House and Senate will draft, debate, and pass the 12 annual funding bills that dictate funding for federal programs. The goal is to pass these bills before the start of the fiscal year, October 1, 2026. If they are unable to agree on funding levels before that date, they may choose to pass a continuing resolution. The appropriations bills cover different areas of government, such as Agriculture, Transportation-HUD, and Financial Services and General Government. The key programs NALCAB tracks are spread across several of these bills, depending on which federal agency administers them. 

What’s in the President’s budget request? 

Community Development Financial Institutions (CDFI) Fund 

• In a repeat of last year’s budget request, the administration has called for wholesale cuts to the CDFI Fund. The proposal would cut the Fund from $324 million in FY26 to $119.5 million in FY27. These changes would eliminate the FA/TA program, the Bank Enterprise Award Program, the Small Dollar Loan Program, the Bond Guarantee Program, the Native American CDFI Assistance Program, the Healthy Food Financing Initiative, and the Economic Mobility Corps. 

• What would remain is a proposed Rural Financial Assistance program, CDFI & CDE certification process, and the New Markets Tax Credit Program. In addition, the budget scales back the Fund’s administrative budget from $33 million to $19.5 million, reducing their workforce by 64% to “account for the reduction in number of programs to administer and reduction in FTEs from attrition from the prior fiscal year.” 

• The Administration does offer an olive branch in its proposal, assuring it would maintain the certification regime and deliver frozen FY25 funds. However, as a whole, this would slash the CDFI Fund to its bare bones, stripping communities of access to affordable capital. Smaller and regional CDFIs, often the only source of affordable lending in their markets, stand to lose the most, with the lack of funding threatening their ability to keep doors open.  

• NALCAB supports funding the CDFI Fund at $324 million and urges Congress to reject this proposal. 

Small Business Administration (SBA) 

• The SBA was a major target for the President, with a proposed top-line cut of $700 million that would leave the agency with only about a third of its FY26 funding. The budget zeroes out several initiatives, including the Program for Investment in Microentrepreneurs (PRIME), Small Business Development Centers, and Women’s Business Centers, slashing entrepreneurial development funding from $330 million to just $21 million, a 94% cut. 

• The agency’s direct loan and loan guarantee programs fared slightly better on paper. The 7(a) program would receive a small bump in maximum guaranteed loan authority, from $35.5 billion to $40 billion, and the Microloan program’s maximum direct loan authority would hold steady at $60 million. But the budget also eliminates Microloan Technical Assistance funding and loan credit subsidies, making it significantly harder for lenders to originate and support these loans in practice.  

• Beyond the budget, recent agency guidance is further narrowing access to SBA lending. New restrictions bar legal permanent residents from loan programs, and stricter underwriting requirements are shrinking the pool of borrowers who can actually use these programs. 

• NALCAB proposes maintaining level top-line funding for the SBA, and specifically funding PRIME at $7 million, and Microloan TA at $41 million. 

Department of Housing and Urban Development 

• Community Development Block Grant  
  • The Administration’s Budget proposes to eliminate the CDBG program.  
  • NALCAB proposes funding the program at $4.2 billion for FY27.  

• HOME Investment Partnership Program  
  • The Budget eliminates HOME, saying that “state and local governments are better positioned to comprehensively address the array of unique market challenges, local policies, and impediments that contribute to housing affordability problems.” 
  • NALCAB proposes funding this vital program at $1.5 billion for FY27. 

• Housing Counseling 
  • The Budget eliminates funding for Housing Counseling, which it says, “has not shown reduced delinquencies for counseled homebuyers and has supported grantees with divisive and DEI promoting agendas.” 
  • NALCAB proposes funding the program at $57.5 million.  

• Rural Capacity Building  
  • The proposed budget eliminates the entire $65 million Self-Help and Assisted Homeownership Opportunity Program umbrella, including the $7 million Rural Capacity Building (RCB) program within it. In its place, the budget proposes a single $16 million grant to Habitat for Humanity to fund sweat equity homeownership projects and strengthen the capacity of its affiliates.  
  • NALCAB proposes funding the RCB program for $7 million for FY27. 

Department of Health and Human Services 

Community Economic Development Program 

• The proposed budget zeroes out funding for the Community Economic Development (CED) program, arguing that it is not meeting “its intended purpose to reduce poverty through services such as job training, and instead focused on equity building and green energy initiatives.” Yet according to the Administration’s own data, CED grants between 2019 and 2024 doubled their job creation at half the mandated cost per job while leveraging $8.40 in private investment for every grant dollar spent.¹  
• NALCAB urges Congress to fund CED at $22.4 million for FY27. 

US Department of Agriculture Rural Housing and Development Programs  

• The President’s budget proposes $2.9 billion in combined funding and loan authority across key USDA rural housing programs including: Section 515 Rural Rental Housing Loans; Section 521 Rental Assistance; Multifamily Preservation & Revitalization (MPR) Loans & Grants; Section 502 Direct Loans; and Section 504 Loans & Grants.  
• NALCAB requests $2.5 billion for these combined programs for FY27.  

US Department of Agriculture Rural Business and Economic Development Loans 

• The 2027 Budget does not include funding for rural business development grants saying that “they are duplicative and overlap with similar business development programs operated by other Federal agencies.” 
• NALCAB proposes funding the program at $52 million for FY27.  

What can you do? 

Read the President’s full budget request here to learn more about how programs you and your organization utilize are affected.  

NALCAB members can review our proposed funding levels for key programs here, and use this to guide your advocacy efforts for these programs. 

Questions? Reach out to NALCAB’s policy team at policy@nalcab.org.