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Federal Government Shuts Down. What Does it Mean for HUD Programs?

Congress failed to pass a stopgap funding measure yesterday, causing parts of the government to shut down at midnight. The Senate had earlier passed a “clean” stopgap funding measure, known as a continuing resolution (CR) that would fund the federal government until February 8. Initially, it looked as though the House would easily pass the CR, until President Trump declared he would veto it if it did not include $5 billion for a southern border wall. In response, the House passed a CR that attached $5.7 billion for the border wall and $7.8 billion for disaster relief. The Senate did not hold a final vote on House’s version of the CR, assuring the government would shut down. Lawmakers, knowing there weren’t enough the votes in the Senate to pass the bill, agreed to hold no further votes until a bipartisan agreement is reached. With Congress at an impasse on how to resolve the controversy over border wall funding, it remains unclear how long the shutdown will be. President Trump threatened via Twitter that the shutdown “will last for a very long time.” Congress and President Trump must still reach an agreement on how to fund federal programs, including affordable housing programs, for the remainder of fiscal year 2019. Lawmakers have already indicated that they are hoping to pass full-year spending bills instead of passing another CR to end the shutdown and reopen the federal government. HUD issued a contingency plan, outlining the shutdown status for HUD programs:

  • Public Housing. Local public housing agencies (PHAs) are not federal government entities and thus will not shut down. But, PHAs receive significant federal funding and their hours and capacities may be impacted by the federal shutdown. Depending on the length of the shutdown, some PHAs may not be able to maintain normal operations. HUD recommends that local PHAs be contacted for information as to their operating levels.
  • Tenant-Based Rental Assistance. According to HUD’s plan, housing assistance payments (HAP) and administrative fees will be disbursed. However, any funding action which requires HUD staff will not be processed during the government shutdown. Obligated HAP funds (HUD-held reserves) are available for draw. HUD will not process requests for tenant protection vouchers for public housing or multifamily actions during the shutdown. PHAs are not required to cease issuing vouchers during a government shutdown. PHAs should assess their financial ability to make payments on behalf of currently assisted households as well as those potentially to be served when considering their ability to issue vouchers.
  • Project-Based Rental Assistance. HUD plans to draw on advanced appropriations to continue housing payments for project-based contracts. According to HUD’s plan, it will make payments under Section 8 contracts, rent supplement, Section 236, and project rental assistance contracts (PRACs) on an as needed basis to ensure ongoing viability of assets and preservation of affordable housing. Payments will be contingent on budget authority being available from prior appropriations or recaptures.
  • Homeless Assistance Grants. According to the contingency plan, HUD homeless assistance grants, including supportive housing for veterans and housing for people with AIDS, will continue to be funded to protect life.
  • HOME Investment Partnerships Program, CDBG. HUD will continue to disburse CDBG, HOME, and other block grant funds where prior year funds have been obligated. CDBG-DR will continue to be funded through multi-year appropriations.

HUD’s contingency plan provides details on agency functions that will continue or will halt for additional HUD programs.

We will be sure to keep you updated on the latest news related to the shutdown and its impacts on affordable housing.