How the Government Shutdown Will Affect Landlords and Tenants

 

The good news is that in most states, October’s Section 8 payments were made prior to the government’s doors closing. The bad news? If the shutdown continues much longer, payments for November and beyond likely won’t continue or, at the very least, will be significantly delayed. This is due to the fact that Housing and Urban Development employees responsible for transferring government funds are furloughed… potentially leaving landlords without compensation and low-income families without monthly financial assistance. In fact, the number of HUD employees has decreased from 8,709 to just 337 during the shutdown.

Approximately 1.2 million households live in public housing units. Some Section 8 voucher recipients receive 30 to 40 percent of their income in rent each month, with the remaining rent paid to the landlord by HUD. Should the government continue its hiatus, Section 8 voucher holders across the U.S. could lose their assistance, face massive rent increases, or possibly be evicted.

HUD has released a contingency plan on how they will proceed during the lapse in government. Here are the HUD FAQs listed in their plan:

Q: Will HUD make payments under Section 8 contracts, rent supplement, section 236, or PRACS where there is a permanent or indefinite authority or multi-year funding?
A:
Only where there is budget authority available from prior appropriations or recaptures. For Section 8 and PRAC contracts, HUD currently anticipates that prior year funding and recaptures will be sufficient to fund contract renewals into November. For Section 236’s, interest reduction payments will continue based and Rent Supplement payments from prior year funding and recaptures will continue.

Q: Will HUD continue to process subsidy payments (HAP’s, PRAC’s)?
A:
Yes, processing of funding will continue to the extent there are appropriated funds available to make payments. HUD currently anticipates that prior year funding and recaptures will be sufficient to fund contract renewals into November.

Q: Will Section 8 waiver requests be processed?
A:
No

Q: Will PBCA’s continue to perform their duties?
A:
Yes, PBCA contracts are funded at this time and they will continue their services as long as appropriated funds remain available.

Q: Will HUD continue to process tenant certifications and electronic voucher payment requests?
A:
Yes. Tenant Rental Assistance Certification System (TRACS) will be available to process vouchers, provided that appropriate funds are available.

Q: Will HUD continue to process requests for contract renewals during the shutdown?
A:
HUD will continue to process contract renewals to the extent that there is budget authority available from prior appropriations or recaptures. HUD currently anticipates that prior year funding and recaptures will be sufficient to fund contract renewals into November.

Q: Will HUD continue to operate the Multifamily Housing End User Support Help Desk during the shutdown?
A: Yes. The Multifamily Housing End User Support Help Desk will respond to questions from users for the following systems:

  • Development Application Processing System
  • Integrated Real Estate Management System
  • Tenant Rental Assistance Certification System
  • And, specific questions related to Multifamily Housing Enterprise Income Verification procedures.

 

Photo credit: KAZVorpal / Foter / CC BY-SA