UPDATE: HUD Says December, January Renewals Must Rely on Reserves

UPDATE: HUD Says December, January Renewals Must Rely on Reserves

According to HUD officials, HUD did not renew 650 rental assistance contracts up for renewal in December. There are an additional 500 contracts up for renewal in January that HUD says will not be renewed.

In a January 4 memo, HUD had clearly stated its inability to renew the January contracts. However, LeadingAge has just learned the likely fate of the 650 contracts that were up for renewal in December but were not renewed prior to the shutdown, which began on December 22.

Of the 650 contracts that expired in December, 224 of them are connected to Section 202 Housing for the Elderly communities (both via Project-Based Rental Assistance (PBRA)/Section 8 contracts and Project Rental Assistance Contracts (PRACs). HUD had decided it does not have the resources to fund these 224 contracts. HUD officials say that 92% of these 224 Section 202 communities have at least $3000 per unit in their reserve accounts. Reasoning that the average annual subsidy for a Section 202 unit is $7000, HUD believes these communities will be “fine for several months” by relying on their reserves. Section 202 owners with contracts expiring in January are expected to rely on their reserves as well during the shutdown.

In addition to the 224 Section 202 communities, there are 170 PBRA contracts (not connected to Section 202 communities) that expired in December prior to the shutdown. For these contract, HUD is attempting to use existing funds within the Office of Housing’s jurisdiction to fund these contracts for December and January. HUD expects this cost will be in the $15 million range. However, using other funds for PBRA renewals required additional financial controls to be put in place, which officials say could take some time to complete.

The remaining 256 contracts that expired in December are for Section 811Housing for Persons with Disabilities communities. HUD expects to be able to use funds carried over from prior years to fund these contracts for December and January.

On January 9, HUD says notices were sent to owners and agents for these 1150 expired December and January contracts.

The work of HUD to address the needs of its housing portfolio is complicated by the fact that staffing at HUD during the shutdown is extremely low. While staff can and are being brought in on an intermittent basis to help with contract expiration issues, HUD right now is down to 325 staff nationally, out of a normal staff of 7000. This includes 100 working during the shutdown within the Office of Housing, including 30 at HUD headquarters.

LeadingAge is extremely concerned about the ability of Section 202 communities to continue to perform all necessary functions during the shutdown and is urging Congress to enact a HUD fiscal year 2019 appropriations bill immediately.

In addition to contacting cbloom@leadingage.org and lcouch@leadingage.org with issues and concerns, members are urged to contact their House and Senate members with these messages:

  • Please protect low income older adults by ending the government shutdown and passing a full year HUD spending bill that provides strong funding for affordable housing programs such as the Section 202 Housing for the Elderly and Project-Based Rental Assistance programs.
  • We are gravely concerned of the shutdown’s immediate and long-term impacts on HUD’s programs and the low income older adults they serve.
  • The shutdown is threatening to destabilize over 1.6 million older adult households that depend on HUD’s rental assistance programs.