Shortfall Needs Outpace Available Funds
On August 9, HUD’s Office of Public and Indian Housing posted Notice PIH 2024-29 (HA): HCV 2024 HAP Funding – Second Offset Based on Excess HAP Reserves. HUD’s notice states:
Based on an analysis of updated program cost data, however, HUD has determined that the magnitude of the funding shortfalls in CY 2024 is larger than previously anticipated. To make additional funds available to prevent the termination of families due to funding shortfalls, HUD has determined it is necessary to exercise a second offset against PHAs’ CY 2024 renewal allocations based on excess HAP reserve funds. Amounts from this second offset will be used to make additional shortfall funding awards in accordance with the requirements under PIH Notice 2024-16 and PIH Notice 2024-21.
Agencies will receive an email correspondence from HUD during the week of August 12, 2024, regarding this second offset, their revised calculations, and other information. This communication will include directions on how to appeal the offset calculation, primarily by providing updated information to HUD about costs and future commitments such as PBV units expected to come online before year-end. All offsets will be from future obligations without any recapture of previously disbursed funds. The deadline for submitting appeals is likely to be the end of August.
HUD is taking this action as it can no longer ignore the cost implications of the steps and guidance previously promoted to housing authorities to increase payment standards, increase lease-up, and look to additional funding upon renewal. As would be expected, per-unit costs have increased at rates greater than costs in the overall housing market or based on prior experience in the HCV program. Because HUD’s primary mandate is to ensure no household’s assistance is revoked due to lack of funding, they are seeking all sources to ensure continuing assistance for those currently assisted.
Congress had allocated $200 million in FY 24 for set-asides, including shortfall funding, as detailed in Section 11 of PIH Notice 2024-16. HUD’s subsequent Notice PIH 2024-21 announced a hold on other set-aside categories, including Unforeseen Circumstances, Portability, and Lower-Than-Average Leasing. (See “Section 8 Voucher Program Turns 50, Current Year Funding May Be Inadequate.” This notice also announced reversion to the prior policy regarding cost-saving actions agencies must take if they are in or at risk of shortfall, such as not re-issuing turnover vouchers.
PHADA has previously raised concerns with HUD and Congress regarding increased costs in the Housing Choice Voucher Program and the potential inadequacy of funding now and in the future, and will provide additional analysis in weeks and months ahead. Members with concerns or information are encouraged to contact PHADA staff at: policy@phada.org.