The Shutdown Ends: Assisted Housing Dodges a Bullet

After 44 days of agonizing uncertainty, Congress voted to end the federal government shutdown on Nov. 13. All things considered, the longest shutdown in U.S. history could have been far worse for the assisted housing industry. Before the shutdown began, HUD said that it would continue to make most previously allocated payments through the end of October while making no assurances for payments after that. As the shutdown dragged on, it looked like the assistance payment spigot might actually be shut off on Nov. 1, threatening to leave millions of people homeless. 

HUD’s Last-Minute Reprieve for November & December

But HUD provided an 11^th hour reprieve by notifying the National Association of Housing and Redevelopment Officials that it would maintain monthly Public Housing Operating Fund and Tenant-Based Rental Assistance funding, including Housing Assistance Payments and administrative fees for Housing Choice Vouchers, Emergency Housing Vouchers, and Mainstream vouchers for November and December. 

In addition, HUD managed to process all projected November HCV shortfalls and had even recalled staff to ensure timely processing of December shortfall payments, based on updated VMS data. 

The Casualties of the Shutdown

While spared the worse, the industry still faced uncertainty for 2026 should the shutdown drag on that long, forcing local PHAs to draw on their reserves to maintain operations and defer or cancel badly needed improvements and capital projects. 

Even less fortunate were the other key HUD programs that remained in a nationwide freeze during the shutdown, including:

Healthcare mortgages: Nearly $2 billion worth of mortgages for HUD-backed healthcare projects were put on hold, delaying availability of over 12,800 beds in care units in over 30 states;

Assistance to seniors: The shutdown temporarily halted FHA-supported reverse mortgage endorsements, delaying access to funds needed by seniors for healthcare, daily living, and aging in place;

Lead hazard abatement: HUD suspended its Lead Hazard Reduction Grant Program, which funds repairs for over 10,000 homes occupied by children who are exposed to lead and other hazards; and

Native American home ownership: Another significant casualty of the shutdown was the HUD Section 184 Housing Program, which provides affordable loans to Native Americans for the purchase of new homes. 

HUD Layoffs

Among the most severely impacted victims were all the HUD workers who lost their jobs. The shutdown did little to thwart the Trump administration’s campaign to reduce the federal government’s workforce. On Oct. 10, the President ordered the layoffs of thousands of federal employees across a broad range of departments. HUD laid off more than 90 staffers from its Real Estate Assessment Center constituting its entire team of building inspectors. Result: The agency will now have to rely solely on outside contractors to perform vital inspections work, assuming that it even keeps its current inspection contracts in place. 

But HUD targeted its biggest cuts for the Office of Fair Housing and Equal Opportunity, where nearly 100 specialists charged with enforcing fair housing laws were let go. A Bloomberg report cites anonymous sources within the agency as stating that HUD laid off the entire fair housing staff at two of its 10 regional offices, including: 

• Denver, which oversees Colorado, Utah, Wyoming, North Dakota, South Dakota, and Montana; and 
• San Francisco, which covers California, Nevada, and Arizona.

Five other regional offices also suffered heavy fair housing staff cuts.