Real Estate·Housing‘Just another nail in the coffin for rural areas’: Affordable housing gram faces the axe under Trump’s tax, budget cutsBy Charlotte KramonBy Jesse BedaynBy Michaela HerbstBy Aaron KesslerBy The Associated PressBy Report for AmericaBy Charlotte KramonBy Jesse BedaynBy Michaela HerbstBy Aaron KesslerBy The Associated PressBy Report for America Heather Colley, right, poses with her son, Michah, outside their Wednesday, Aug.
27, 2025, in Talbott, Tenn.
AP Photo/George Walker IVHeather Colley and her two children moved four times over five years as they fled high rents in eastern Tennessee, which, much of rural America, hasn’t been spared from soaring housing costs.
A family gift in 2021 of a small plot of land offered a shot at ownership, but building a house was beyond reach for the 45-year-old single mother and manicurist making $18.50 an hour.
That changed when she qualified for $272,000 from a nonfit to build a three-bedroom because of a grant gram that has helped make affordable housing possible in rural areas for decades.
She moved in last June. “Every time I pull into my garage, I pinch myself,” Colley said.
Now, President Donald Trump wants to eliminate that grant, the Investment Partnerships gram, and House Republicans overseeing federal budget negotiations did not include funding for it in their budget posal.
Experts and state housing agencies say that would set back tens of thousands of future affordable housing developments nationwide, particularly hurting Appalachian towns and rural counties where government aid is sparse and investors are few.
The gram has helped build or repair more than 1.3 million affordable s in the last three decades, of which at least 540,000 were in congressional districts that are rural or significantly rural, according to an Associated Press analysis of federal data.
“Maybe they don’t realize how far-reaching these grams are,” said Colley, who voted for Trump in 2024.
Among those half a million s that helped build, 84% were in districts that voted for him last year, the AP analysis found.
“I understand we don’t want excessive spending and wasting taxpayer dollars,” Colley said, “but these posed budget cuts across the board make me rethink the next time I go to the polls.” The gram, started under President George H.
W. Bush in the 1990s, survived years of budget battles but has been stretched thin by years of rising construction costs and stagnant funding.
That’s meant fewer units, including in some rural areas where prices have grown faster than in cities.
The gram has spent more than $38 billion nationwide since it began filling in funding gaps and attracting more investment to acquire, build and repair affordable s, HUD data shows.
Additional funding has gone toward jects that have yet to be and rental assistance.
’s future is in political limbo To account for the gap left by the posed cuts, House Republicans want to draw on nearly $5 billion from a related pandemic-era fund that gave states until 2030 to spend on jects supporting people who are unhoused or facing lessness.
That $5 billion, however, may be far less, since many jects haven’t yet been logged into the U.S.
Department of Housing and Urban Development’s tracking system, according to state housing agencies and associations representing them.
A spokesperson for HUD, which administers the gram, said isn’t as effective as other grams where the money would be better spent.
In opposition to Trump, Senate Republicans have still included funding for in their draft budget.
In the coming negotiations, both chambers may commise and reduce but not terminate ’s funding, or extend last years’ overall budget.
White House spokesperson Davis Ingle didn’t respond to specific questions from the AP. Instead, Ingle said that Trump’s commitment to cutting red tape is making housing more affordable.
A bipartisan group of House lawmakers is working to reduce ’s notorious red tape that even ponents say slows construction.
Some rural areas are more dependent on In Owsley County — one of the nation’s poorest, located in the rural Kentucky hills — residents struggle in an economy blighted by coal mine closures and declining tobacco crop revenues.
Affordable s are needed there, but tough to build in a region that doesn’t attract larger-scale rental developments that federal dollars typically go toward.
That’s where comes in, said Cassie Hudson, who runs Partnership Housing in Owsley, which has relied on the gram to build the majority of its affordable s for at least a dozen years.
A lack of additional funding for has already made it hard to keep up with construction costs, Hudson said, and the organization builds a quarter of the single-family s it used to.
“Particularly for deeply rural places and persistent poverty counties, local housing developers are the only way s and new rental housing gets built,” said Joshua Stewart of Fahe, a coalition of Appalachian nonfits.
That’s in part because investment is scant and steps in when construction costs exceed what a can be sold for — a common barrier in poor areas of Appalachia.
Some developers use the fits to build more affordable units. Its loss would erode those nonfits’ ability to build affordable s in years to come, Stewart said.
One of those nonfits, Housing Development Alliance, helped Tiffany Mullins in Hazard, Kentucky, which was ravaged by floods.
Mullins, a single mother of four who makes $14.30 an hour at Walmart, bought a house there thanks to funding and moved in August.
Mullins sees the gram as preserving a rural way of life, recalling when folks owned s and land “with gardens, we had chickens, cows.
Now you don’t see much of that.” It’s a long-term impact In congressional budget negotiations, is an easier target than grams such as vouchers because most people would not immediately lose their housing, said Tess Hembree, executive director of the Council of State Community Development Agencies.
The effect of any reduction would instead be felt in a fizzling of new affordable housing supply.
When funding was temporarily reduced to $900 million in 2015, “10 to 15 years later, we’re seeing the ramifications,” Hembree said. That includes affordable units built in cities.
The biggest gram that funds affordable rental housing nationwide, the Low Income Housing Tax Credit, uses grants for 12% of units, totaling 324,000 current individual units, according to soon-to-be-published Urban Institute re.
Trump’s spending bill that Republicans passed this summer increased LITHC, but experts say further reducing or cutting would make those credits less usable.
“It’s LITHC plus , usually,” said Tim Thrasher, CEO of Community Action Partnership of North Alabama, which builds affordable apartments for some of the nation’s poorest.
In the lush mountains of eastern West Virginia, Woodlands Development Group relies on for its smaller rural jects.
Because it helps people with a wider range of incomes, is “one of the only grams available to us that allows us to develop true workforce housing,” said executive director Dave Clark.
It’s those workers — nurses, first responders, teachers — that nonfits east Tennessee’s Creative Compassion use to build for.
With the gram in jeopardy, grant administrator Sarah Halcott said she fears for her clients battling rising housing costs. “This is just another nail in the coffin for rural areas,” Halcott said.
___ Kramon reported from Atlanta. Bedayn reported from Denver. Herbst contributed from New York City, and Kessler reported from Washington, D.C.
___ Kramon is a corps member for The Associated Press/Report for America Statehouse News Initiative.
Report for America is a nonfit national service gram that places journalists in local newsrooms to report on undercovered issues.
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