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Department Releases Shortfall Funding Notice

HUD recently released Notice PIH 2023-18, “Implementation of Public Housing Operating Fund Shortfall Funding from Federal Fiscal Year (FFY) 2023 Appropriations.” The 2023 Consolidated Appropriations Act provided $25 million in funds to assist HAs that experience or are at risk of experiencing financial shortfalls. This notice provides information on HA eligibility and the application process to receive shortfall funding.  

Shortfall funding is limited to HAs that administer a public housing program with active Annual Contributions Contracts (ACCs). HAs that received shortfall funding in FY 22 are eligible to receive shortfall funding in FY 23. Moving to Work (MTW) HAs are eligible to receive shortfall funding if they have not used their MTW financial flexibility to reduce their operating reserves. While HAs of all sizes are eligible to receive shortfall funding (provided they meet other eligibility criteria), funds will be prioritized to agencies that operate 249 or fewer public housing units.


Shortfall Calculation and Eligibility

Through shortfall funding, HAs with fewer than three months of operating expenses held in reserves are eligible to receive funding. The amount of funding that agencies can receive is the difference between their current Monthly Operating Reserves (MOR) and three months of operating expenses.  The Notice provides greater detail on HUD’s calculation of operating reserves, but in short it is the sum of assets (both restricted and unrestricted) minus current liabilities and long-term debt from capital projects.  Members should consult the Notice for the specific FDS fields that the Department has used in this calculation. 


Shortfall Funding and TARs

The notice states that “The growth in TARS has been abnormally high since the start of the COVID-19 pandemic.” In response, HUD has adjusted its shortfall calculation to include a “one-time Excess TARS adjustment.” The Notice includes more details on this calculation, and it notes that it will increase the amount of shortfall funding that HAs are eligible to receive.  PHADA recently wrote to appropriators regarding our concerns around tenants accounts receivable (TARs).  The Association will continue to advocate for HAs experiencing elevated TARs, including for regulatory relief around PHAS scoring.


Eligible HAs Must Apply by August 17

HUD has published a list of agencies eligible to receive shortfall funding on its Operating Fund Grant Processing website. The Notice states that eligibility determinations were made in PIC and FDS as of July 14, 2023. If an HA believes it has been erroneously excluded from receiving shortfall funding, it may submit an appeal through the OpFund Web Portal. 

Eligible HAs should apply for Shortfall funding by 5:00 pm ET on August 17, 2023 through the OpFund Web Portal. Additionally, the Department recently emailed agencies with training materials on the shortfall application process, as well as links to register for training webinars on July 25 and 26. If you did not receive this email, please email: publichousingportal@hud.gov for information.

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