HUD PIH Issues Notice Providing Public Housing Operating Fund Shortfall Funding

HUD’s Office of Public and Indian Housing (PIH) issued Notice PIH-2021-12, making a $25 million public housing Operating Fund set-aside available to public housing agencies (PHAs) experiencing a financial shortfall or at risk of a shortfall. The “2021 Appropriations Act” set aside the $25 million and the Joint Explanatory Statement accompanying the act directs that highest priority be given to PHAs with 249 or fewer public housing units and that have less than one month of reserves.

For the purposes of Notice PIH-2021-12, PIH defines a financial shortfall as a PHA having less than two months of operating expenses held in reserve. Eligibility for the Shortfall Funding Program will be based on the amount of a PHA’s Monthly Operating Reserves (MOR). The amount of funding that a PHA is eligible to receive under the set-aside is equal to the difference between a PHA’s MOR for the PHA fiscal year end and the amount that is equal to two months of MOR for that PHA.

The notice links to a list of PHAs eligible for shortfall assistance and the amount each is eligible to receive. Following the congressional Joint Explanatory Statement regarding priority in providing shortfall funding, PIH established six groups of PHAs based on their number of public housing units:

  1. PHAs with fewer than 100 units
  2. PHAs with at least 100 and not more than 249 units
  3. PHAs with at least 250 and not more than 499 units
  4. PHAs with at least 500 and not more than 1,249 units
  5. PHAs with at least 1,250 and not more than 6,599 units
  6. PHAs with at least 6,600 units

PHAs that received shortfall funding in FY20 are eligible to receive shortfall funding in FY21. The Notice describes circumstances enabling some PHAs that converted under the Rental Assistance Demonstration (RAD) to be eligible for shortfall funding.

All PHAs that receive shortfall funding will receive an award letter that identifies actions not specific to the PHA that the PHA can take to improve their financial performance. These actions are operational improvements that PIH has historically recommended to insolvent PHAs. PIH encourages PHAs to consider the impact on residents and supportive service programs when determining next steps. The list of actions are:

  • Reduce costs/increase revenue
  • Increase program rent revenue by improving occupancy and evaluating rent collection policies and actions
  • Consider selling property/assets in accordance with HUD’s disposition regulations
  • Convert properties through a RAD conversion and possibly with Low-Income Housing Tax Credits.
  • Reposition capital assets that are beyond their useful life
  • Seek additional financing (e.g., debt, equity, cash flow) through your municipality, finance authority, and housing trust fund
  • Renegotiate contracts with workforce and/or vendors
  • Restructure the agency’s organization and staff
  • Evaluate utility consumption and energy policies and consider implementation of energy conservation measures and agreements to reduce energy costs

PHAs that receive shortfall funding are required to collaborate with their HUD Field Office to identify specific issues at the PHA and develop a plan identifying actions that the PHA can take to improve their financial performance. The Field Office will document these efforts by creating an improvement plan. Shortfall funding will be recaptured from PHAs that do not sufficiently collaborate with their Field Office to develop an improvement plan.

Notice PIH-2021-12 is at:

The list of eligible PHAs is at:

The PIH Shortfall Funding website is at:

More information about public housing is on page 4-30 of NLIHC’s 2021 Advocates’ Guide.