A Strategic Ascent for Affordable and Public Housing Organizations Amid Federal Budget Challenges

For affordable and public housing organizations, the current fiscal climate feels like standing at the base of a towering mountain, clouds obscuring the summit and the trail ahead uncertain. Recent federal budget proposals represent an intimidating uphill climb for subsidized housing, with the trail marked by funding cuts and shifting policy landscapes.

As these organizations look upward, they must plan their ascent with precision—maximizing efficiency, reducing dependency on unstable funding sources, and reinforcing their mission to reach the top of the mountain and better serve vulnerable communities despite challenging terrain.

The Steepest Slopes: Federal Budget Proposals

The first major obstacle facing housing organizations is the steep drop in federal support proposed in recent budget developments. These proposals threaten to erode the financial support many housing organizations rely on for stability and service delivery.

One such proposal – the administration’s “skinny budget” – outlines substantial cuts to HUD programs, including:

• Rental Assistance Programs: A proposed $26.72 billion reduction, consolidating various programs into a State Rental Assistance Block Grant. This move could lead to a 43% decrease in funding, with additional restrictions such as a two-year time limit for “able-bodied adults.”
• Homelessness Assistance Grants: A $532 million cut, consolidating several programs into the Emergency Solutions Grant (ESG), potentially limiting support for individuals experiencing or at risk of homelessness.
• Community Development Block Grant (CDBG) and HOME Investment Partnerships Program: Proposed eliminations of these programs could significantly impact local affordable housing initiatives.

These developments have raised alarms among housing organizations, particularly public housing authorities, about the sustainability of their funding and the potential impact on services provided to low-income communities.

LIHTC: A Reliable Anchor in Unstable Terrain

The Low-Income Housing Tax Credit (LIHTC) remains a dependable anchor amid fiscal uncertainty. While other supports may shift or fall away, LIHTC continues to offer a critical foothold in the pursuit of long-term housing solutions.

Despite federal budget uncertainties, the LIHTC program continues to receive strong bipartisan support. The reintroduced Affordable Housing Credit Improvement Act (AHCIA) of 2025 aims to expand and reform LIHTC, with key provisions including:

• 50% Increase in LIHTC Allocations Over Two Years – This substantial boost enables states to finance hundreds of thousands of additional affordable rental homes over the next decade, directly addressing the housing affordability crisis.
• Reduction of the “50% Test” to 25% for Tax-Exempt Bond Financing – Lowering the threshold from 50% to 25% allows more projects to qualify for the 4% Housing Credit, unlocking additional resources for affordable housing development.
• Increased Credit for Developments Serving Extremely Low-Income Tenants – Projects dedicating at least 20% of units to households earning 30% or less of the area median income will receive a higher tax credit, making such developments more financially viable.
• Support for Housing Credit Developments in Rural and Native American Communities – Targeted incentives for these areas address longstanding disparities and encourage investment in underserved communities.
• Prohibition of Local Approval Requirements that Delay Developments – Eliminating unnecessary local approvals streamlines the development process, reducing delays and associated costs.
• Clarification of Community Revitalization Plan Definitions – Allowing states to define these plans ensures flexibility and responsiveness to local needs, facilitating more tailored and effective development strategies.
• Alignment with the Violence Against Women Act – Ensuring consistency with this law strengthens protections for vulnerable populations, promoting safer housing environments.
• Flexibility in Income Recertifications During Property Refinancing – This provision allows for smoother transitions during refinancing, maintaining affordability and stability for existing tenants.

These reforms aim to bolster the effectiveness of the LIHTC program, enabling housing providers to better meet the needs of low-income communities and navigate the challenges posed by current fiscal constraints.

However, LIHTC projects often rely on “soft funds” from state and local programs to bridge financing gaps. If HUD funding cuts impact these programs, it could pose challenges for the viability of LIHTC deals. Additionally, many LIHTC properties depend on the Housing Choice Voucher (HCV) program, and potential reductions in rental assistance could affect property revenues.

Establishing Basecamps: Strategies for Operational Efficiency

To reach higher ground in today’s uncertain climate, housing organizations must build resilient basecamps—operational structures that support progress, conserve resources, and withstand funding pressures. Strengthening these internal systems isn’t just a survival tactic—it’s a path to sustainability.

Compliance Management

Ensuring ongoing regulatory compliance is critical to maintaining funding, avoiding costly penalties, and building trust with stakeholders.

Best Practices and Tips:

• Automate compliance checks to reduce manual error and ensure consistent documentation across all programs, including LIHTC, HOME, and Section 8.
• Centralize document storage so staff can quickly access resident eligibility records, income verifications, and inspection reports.
• Use real-time dashboards to track deadlines for recertifications, inspections, and reporting, helping staff stay ahead of HUD and IRS requirements.
• Integrate verification tools (e.g., The Work Number) to streamline income and employment verification and reduce back-and-forth with applicants.
• Invest in staff training to ensure your team stays up to date with evolving federal and state program requirements.

Property Management

Improving day-to-day property operations can directly impact resident satisfaction, reduce maintenance costs, and improve net operating income.

Best Practices and Tips:

• Implement preventive maintenance schedules to avoid costly emergency repairs and extend the life of building systems.
• Use mobile work order apps to allow maintenance staff to respond faster to issues and close requests in the field, reducing downtime.
• Track utility usage to identify inefficiencies. Something as simple as replacing outdated lighting can yield thousands in savings annually.
• Standardize tenant communication using portals that provide updates on rent, inspections, and community events to reduce incoming calls and office traffic.
• Benchmark operational performance across your portfolio to identify underperforming properties and make data-driven improvements.

Asset Management

Strategic asset management ensures that every dollar invested in your housing portfolio drives long-term value and affordability.

Best Practices and Tips:

• Maintain long-term capital planning models that incorporate useful life estimates and projected funding needs.
• Leverage integrated financial reporting tools to combine operational data with capital forecasts, helping you present more compelling funding applications to local agencies or investors.
• Use predictive analytics to flag properties at risk of underperformance before they become financial drains.
• Track and manage reserve balances to ensure funds are available for critical repairs without jeopardizing cash flow.
• Collaborate closely with LIHTC syndicators and lenders to ensure that reporting aligns with investor expectations and compliance milestones.

Outfitting the Climb: MRI Software Solutions

As any experienced climber knows, success is often defined by the quality of your gear. For housing organizations ascending today’s fiscal peaks, the right tools can make a significant difference in performance, agility, and safety.

MRI Software offers a suite of affordable and public housing solutions designed to assist housing organizations in navigating current challenges:

• MRI PHA Pro: A comprehensive solution for public housing and voucher management, automating compliance tasks and improving tenant interactions.
• MRI Energy: A tool for energy management, helping organizations reduce utility costs and enhance sustainability efforts.
• Assistance Connect and RentPayment: Platforms facilitating online applications, rent payments, and communication with tenants.
• WaitListCheck: A solution for managing waitlists efficiently, ensuring timely placement of applicants.
• The Work Number: A verification tool streamlining income and employment verification processes.
• MRI Secure Sign: An electronic document signing solution, reducing paperwork and expediting processes.
• Accounting Services: Cost-effective capacity expansion options to support financial operations.

Investing in these solutions can lead to improved operational efficiency, cost savings, and reduced dependency on federal funding, contributing to the long-term sustainability of housing organizations.

Reaching the Summit: A Path Forward to Resilience

As housing organizations press forward, the peak remains distant—but not unreachable. The path is steep, the air is thin, and the margins for error are narrow. Yet by establishing strong internal systems, leveraging effective tools, and aligning with proven programs like LIHTC, organizations can chart a path to the summit with confidence and determination.

While federal uncertainty may reshape the trail, the mission endures. With strategic planning and operational discipline, affordable and public housing providers can continue their vital work—bringing stable and decent homes to those who need it most.