President’s FY27 Budget Request Proposes CDFI Fund Cuts, Congress to Determine Final Funding
Lily Jin, Senior Associate, Public Policy, OFN
As Congress begins to debate FY27 federal spending bills, the President’s Budget proposes eliminating core CDFI Fund programs with the replacement of a new rural initiative
Read time: 5 minutes
On April 3, the White House published its fiscal year (FY) 2027 President’s Budget, which details the Trump Administration’s funding priorities and proposed cuts for Congress to consider as it works to pass FY27 appropriations bills. OFN released a statement on the budget proposal that urges Congress and the Administration to work together to fully fund the CDFI Fund in FY27. The President’s proposal recommends a total funding level of $119.5 million for the CDFI Fund in FY27, a $204.5 million cut from the FY26 enacted appropriation of $324 million, and restructuring the CDFI Fund as the Rural Community Development Fund. It remains strategically in line with recommendations proposed last year, eliminating core CDFI programs and replacing them with a new rural financial assistance award.
$100 million of the funds would be allocated to a Rural Financial Assistance Program, intended to provide financial assistance, technical assistance, and training and outreach to rural communities. The remaining $19.5 million would go towards administrative and research funding, with a proposal to drastically reduce full-time CDFI Fund staff. It also proposes elimination of the CDFI Bond Guarantee Program, a departure from last year’s budget request.
Cuts Across Other Agencies
With the overall reduction in discretionary spending across the board, many other agencies saw similar proposals for sharp cuts.
The Administration proposed the elimination of the Small Business Administration (SBA) Microloan Program, all Entrepreneurial Development Programs apart from Veteran’s Outreach, and a 39% staffing cut.
At the Department of Housing and Urban Development (HUD), the budget specifically proposes eliminating key programs including the Community Development Block Grant (CDBG) and HOME Investment Partnerships programs.
Additional eliminations include PRO Housing, Housing Counseling, Choice Neighborhoods, and Self-Sufficiency programs, among others. Several core housing programs are maintained or modestly adjusted, including increases to Housing Choice Vouchers and Public Housing, alongside targeted reductions to other programs. The budget also proposes eliminating NeighborWorks America, providing only $15 million to close out the program.
On par with the FY26 budget proposal, the FY27 budget recommends deep cuts to the Minority Business Development Agency.
Several U.S. Department of Agriculture (USDA) housing programs were proposed to be reduced or eliminated, including rural housing vouchers and single-family housing direct loans, in addition to the elimination of Rural Business Service programs.
Status of CDFI Fund Awards
Budget documents from Treasury published as part of the rollout of the President’s Budget Request indicate that the CDFI Fund anticipates awarding the FY25 CDFI and NACA Financial and Technical Assistance awards in FY26. However, the documents did not detail plans to make awards for the Capital Magnet Fund or from the FY26 appropriated program funds.
OFN continues to engage with congressional allies to ensure the timely release of FY26 and future CDFI Fund appropriations.
What’s Next
While the President’s Budget Request serves as a statement of the White House’s priorities, it is up to Congress to direct government spending through the annual appropriations process. CDFIs have maintained robust bipartisan support with Congress passing consistent appropriations for the CDFI Fund for the past four fiscal years under multiple administrations.
OFN will continue to emphasize the critical role that CDFIs play in the Administration’s affordability goals and work with Congress to preserve the current federal funding level of $324 million for the CDFI Fund in FY27.
CDFIs and industry allies are also essential in demonstrating the importance of the CDFI Fund. Now is the time to contact your elected officials and highlight how CDFIs are expanding economic opportunity and strengthening your community. Take action today through the OFN Policy Action Center.
Save the Date
Join us from October 20-23 in New Orleans, LA for the 42nd annual OFN Conference!
Stay Connected
Subscribe to receive regular updates straight to your inbox and check out our blog for the latest coverage from OFN and the CDFI industry.
Follow us on social media.
More From OFN
-
House Appropriations Committee Approves $276.6 Million for CDFI Fund for FY27
The Committee maintains its funding proposal from previous years and directs all previously appropriated CDFI funding to be promptly obligated… Read More
-
Remaining $289 Million in FY25 Funds Released for the CDFI Fund, Treasury Announces Award Reforms
Following consistent advocacy from OFN in partnership with congressional champions, allies, and member CDFIs, the Office of Management and Budget… Read More
-
New Research Evaluates OFN’s Flagship Financing Program
To better understand the impact of its financing program, OFN has released a new report with interim findings from a… Read More