What Does the Shutdown Mean for HUD’s Programs?

HUD Funded for October
After Which Uncertainty Reigns

What Does the Shutdown Mean for HUD’s Programs?On September 30, 2013, Congress failed to provide FY14 funding for the federal government to operate, which caused the government to shut down beginning at midnight on October 1, 2013.

On September 27, 2013, HUD issued a contingency plan outlining the impact of a shutdown on HUD programs. HUD’s largest rental assistance programs, the Housing Choice Voucher, Public Housing, and Project-Based Rental Assistance programs, appear to have funding to continue normal operations through October, either through previously-obligated funding or advance appropriations. After October, HUD’s contingency plan is largely silent.

In its contingency plan, HUD outlined shutdown status for these major programs:

  • Tenant-Based Rental Assistance – According to HUD’s plan, October’s Housing Assistance Payments and administrative fees will be disbursed but there are no payments beyond October scheduled to be disbursed at this time. HUD will not process requests for tenant protection vouchers for public housing or multifamily actions during the shutdown.
  • Project-Based Rental Assistance – HUD plans to draw on advanced appropriations to continue housing payments for project-based contracts for October. According to HUD’s plan, it will make some payments under Section 8 contracts, rent supplement, Section 236, and project rental assistance contracts (PRACs) where there is budget authority available from prior appropriations or recaptures. HUD will not process any Section 8 contract renewal or waiver requests during the shutdown.
  • 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. HUD’s contingency plan predicts that most of the country’s 3,300 PHAs have the necessary funds to continue providing public housing assistance for the remainder of the month. However, 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.
  • HOME Investment Partnerships Program, CDBG – According to HUD’s plan, it will “continue to disburse CDBG, HOME funds, and other block grant funds in cases where failure to address issues result in a threat to safety of life and protection of property.” HUD’s plan indicates that “cities and states would not be able to receive additional CDBG funds,” but HUD will disburse CDBG, HOME, and other block grant funds that have already been appropriated, and competitive funds that have been awarded and are under grant agreement.
  • Homeless Assistance Grants – As Monarch has previously reported, 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 against imminent threats to the safety of human life.”

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

The shutdown occurred because the House refused to pass a “clean” continuing resolution (CR) and the Senate refused to pass a CR that made funding contingent on modifying the Affordable Care Act, leaving the two chambers at an impasse.

HUD anticipates that approximately 400 employees will be classified as “excepted” from the shutdown and will continue working in order to perform duties for programs also “excepted” from the shutdown. The programs, or functions of programs, that have been deemed “excepted” from the shutdown will continue to operate. These include homeless assistance programs, the distribution of HUD block grants, and FHA insurance programs “where the failure to address issues result in a threat to safety of life and protection of property.”

Click here to view HUD’s contingency plan.