It’s no secret that affordability remains one of the major issues with the housing market, especially for first-time homebuyers. The average downpayment in the U.S. reached a record high of $30,250 last year, according to Realtor.com. And that puts the dream of homeownership out of reach for many.

At the same time, the Trump administration is aggressively making cuts at all levels of federal government in both staffing and funding. Agencies and programs aimed at promoting affordable housing aren’t being spared. The administration’s budget released in early May called for $33.6 billion in cuts to the Department of Housing and Urban Development (HUD).

That worries some housing advocates, including Miki Adams, president of CBC Mortgage Agency, a nationally chartered finance agency that provides downpayment assistance and counseling for qualifying borrowers. 

“I get that there are reasons to look at some of our federal programs and determine whether they’re actually working for the benefit of the people that they’re supposed to be there to help,” Adams said. “But are we doing enough research and investigation before we’re pulling the plug on certain programs?”

CBC receives no funding from U.S. government. Still, she’s concerned about potential cuts from a range of housing programs, from Section 8 housing vouchers to the Office of Native American Programs, which funds housing in tribal communities. 

“Those in D.C. need to carefully consider reductions and changes to agencies and staffing that are directly connected to housing initiatives,” Adams said. “We have a very serious housing affordability challenge in America right now.” 

One program under scrutiny during the spring was NeighborWorks America, a congressionally chartered nonprofit that aims to help people live in affordable homes. The Department of Government Efficiency was already looking at gaining access to the program, which is a problem “where they’ve done this in the past, it results in basically the destruction of the agency,” said David Dworkin, president and CEO of the National Housing Conference.

Then, the administration released its budget, which also called for the elimination of NeighborWorks. Congress would still need approve the cuts.

NeighborWorks is a conduit to support nonprofits “across the country, particularly those in rural areas who are serving frankly, mostly red states, so we’re hopeful that this is not going to be the case, but you have to take it very seriously,” Dworkin said.

Dworkin said he was encouraged that Federal Housing Finance Agency Director Bill Pulte has been “clear that making Fannie Mae and Freddie Mac more effective in serving more people is one of his top priorities.”

Dworkin noted that tariffs in the long term could increase the costs of building materials used for starter homes. But the Trump administration could help to reduce regulatory burdens that impede building affordable housing.  

“The bottom line is we need more housing that’s affordable to first-time homebuyers, and that’s going to happen when we are serious about regulatory reform,” Dworkin said.

In January, just days after taking office, the Trump administration attempted to pause all federal payments for grants and other programs, a plan that sparked widespread confusion. The administration backed down just a couple of days later.

The tempest led Down Payment Resource (DPR) to examine how many downpayment assistance programs in the U.S. rely solely on federal funding. DPR works with lenders, real estate agents and companies such as Zillow to connect homebuyers with downpayment assistance programs.

DPR’s CEO Rob Chrane said that just about a third of the nearly 2,500 downpayment assistance programs relied exclusively on federal funds. On the positive side, that meant two-thirds rely on state and local funds as well as private funding. And homebuyers often qualify for multiple downpayment assistance programs, so most homebuyers would still qualify for downpayment assistance if federal funding falters.

Still, Chrane said he would hate it if the federal government were to cut funding to downpayment assistance programs. It’s not just the loss of funding; it could create a misperception for many potential homebuyers.

“You could imagine that this would be headline news and something that gets misunderstood,” Chrane said. “And all of a sudden people start getting the message or the impression that, ‘Oh my gosh, there’s no more downpayment assistance funding because the federal government cut it off,’ but in fact there still is.” 

National Housing Conference’s Dworkin said that downpayment assistance programs such as CBC Mortgage and Down Payment Resource will be needed, especially with the uncertainty of federal housing programs. 

He noted that employer-assisted housing programs can also help employees with downpayments in exchange for a commitment to remaining with a company or organization for a period of time. Many hospitals, universities and other companies offer this as a benefit.

“National Housing Conference, a small nonprofit, actually has a downpayment assistance program,” Dworkin said. “And our first employee [the director of research] just bought her first home with it.”