Potential federal cuts could lead Interfaith Housing Alliance to shrink services

Yahoo

6 hours ago

Jodie Ostoich, the president and CEO of the Interfaith Housing Alliance, said it's hard to say how much of the organization's funding is in jeopardy due to possible federal funding cuts for fiscal year 2026.
About 30% of the alliance's funding comes directly from the federal government, but the nonprofit also gets state 'pass-through' grants with federal money.
'We have deep concern about the proposed federal budget cuts to housing programs, which will have devastating effects on families across the nation,' Ostoich wrote in an email in May to community members asking for donations.
'The recent budget proposal includes significant reductions to essential housing assistance programs, which are critical for the well-being of millions of Americans.'
The federal fiscal year begins Oct. 1. President Donald Trump's proposed budget was submitted to the U.S. Senate's Appropriations Committee on May 2.
The administration released an appendix to the proposed budget on May 30.
The Senate Appropriations Committee is still reviewing Trump's proposal, with several subcommittee hearings scheduled for next week.
'The recommended funding levels result from a rigorous, line-by-line review of FY 2025 spending, which was found to be laden with spending contrary to the needs of ordinary working Americans and tilted toward funding niche non-governmental organizations and institutions of higher education committed to radical gender and climate ideologies antithetical to the American way of life,' Russell Vought, director of the U.S. Office of Management and Budget, wrote in a letter to Appropriations Committee Chair Sen. Susan Collins introducing the budget proposal.
The Interfaith Housing Alliance (IHA), founded in 1990, develops affordable housing and offers educational programs and social services in parts of Maryland and Pennsylvania to low- and moderate-income communities.
Some educational programs include the organization's 'Credit Café,' through which people can better understand their credit and credit reports, and a financial freedom bootcamp.
The IHA also offers a purchase-repair homeownership program, with free technical assistance to participants in Frederick, Carroll and Washington counties throughout the homeownership process.
The organization also manages affordable rental communities throughout central and western Maryland, as well as southcentral Pennsylvania.
Ostoich said in an interview that in 2024, over 200 people participated in IHA workshops. At the end of last year, 15 people were in the homeownership program.
Additionally, she said, about 270 households are living in the properties IHA manages.
CUTS AND IMPACTS
In her May email asking for donations, Ostoich outlined possible reductions to housing assistance programs proposed in the federal budget that would impact the IHA or were used by the organization to develop housing. Those cuts include:
* A reduction of $26.7 billion from the U.S. Department of Housing and Urban Development's State Rental Assistance Block Grant. Rental assistance programs will be restructured into a block grant system with capped financial support for able-bodied adults.
* Eliminating $3.3 billion in flexible funding through the Community Development Block Grant that supports housing rehabilitation, infrastructure and neighborhood revitalization
* Cutting $1.25 billion from the HOME Investment Partnerships Program, which supports building and preserving affordable housing
* A reduction of $721 million in rural development housing programs, pulling back federal engagement with housing in underserved rural areas
In an interview Wednesday, Ostoich said that if the cuts are approved, the IHA would have to shrink, and it would have to reassess what other programs it could offer.
'It certainly would open the door to many more collaborations, I think, that potentially hadn't happened before,' she said. '... Obviously, I don't have a crystal ball of what could happen.'
Ostoich wrote in her email that the IHA has used Community Development Block Grant money to fund repairs and deliver supportive services throughout Frederick County and has used HOME Investment Partnerships Program funding to partially finance four tax credit projects with a total of 129 housing units.
Additionally, the IHA has used the State Rental Assistance Block Grant at an apartment community it manages on North Market Street.
Ostoich said that every two years, the IHA has received a rural development grant, and the organization usually states how many housing units it will complete in that two-year grant period.
'What that relies on is those mortgages that [the USDA's] Rural Development makes available to low- and moderate-income households. They are special mortgages that make the mortgage affordable, so there's no other product quite like them,' she said.
These mortgages are made more affordable through things like extended payment terms. There's more leniency, and these mortgages help people who want to buy homes begin to build generational wealth for their families.
Ostoich said there isn't money for these Rural Development mortgages in the fiscal year 2026 budget proposal. She said getting this mortgage funding has been an issue since February 2024.
The IHA is working on a new homeownership program that isn't limited to rural areas and would open up more homeownership opportunities to people in urban areas.
That way, the program wouldn't have to depend on funding from Rural Development and could get money from other sources. Since last year, the IHA has felt more urgency to develop this new program, Ostoich said.
The reduction of the IHA's programs and workshops would impact other local nonprofits, such as the United Way of Frederick County, that collaborate with the organization.
United Way serves individuals who are ALICE, which stands for Asset Limited, Income Constrained, Employed. People who are ALICE make above the federal poverty line but still struggle to afford basic necessities, including housing.
Ken Oldham, United Way's CEO, said that his organization frequently partners with the IHA to help financially struggling families begin the journey to homeownership.
He said United Way pairs people with the IHA's purchase-repair homeownership program. It also uses the Credit Café workshops in its own 'Pathway to Homeownership' program to effectively educate people and help them repair their credit.
Pairing with other programs like the IHA's homeownership program 'really opens the door for ALICE households to make a generational-changing financial move on behalf of themselves and their families,' Oldham said.
If the IHA has to shrink its program offerings, that could exacerbate the challenges ALICE households face trying to buy homes, such as poor credit and expensive mortgages.
'It would put United Way in a position where we would have to figure out that credit piece [of Pathway to Homeownership] on our own. ... The IHA does such a great job with it. That would be painful. That would be very difficult,' Oldham said. 'The lack of that rural purchase program would take a very significant tool out of the toolbox for ALICE households to purchase a home.'
Ostoich said she's still looking for projects for the IHA to do at the direction of the nonprofit's Board of Directors.
'I am still pounding that pavement and trying to move forward in ways that will deliver on the mission we're committed to,' she said. '... There's a lot of concern about being able to serve people and knowing that nonprofits often fill the gaps for government programming, really wondering what is going to happen to people if nonprofits cannot continue to serve the number of people they do.'