Congress Acts to Address Project-Based Section 8 Funding Crisis

This NHLP Housing Law Bulletin article is from Oct. 2008. Prior Bulletin articles have described the inability of the Department of Housing and Urban Development (HUD) to make timely payments to project-based Section 8 owners, and HUD’s strategy to cope with Fiscal Year (FY) 2008’s funding shortfall—providing only “funding increments,” good for several months at a time. The shortfall—the additional funds required to fully back one-year renewal contracts—has been acknowledged by HUD and is now estimated to be at least $2.5 billion for FY 2009, a huge chunk of the program’s $6.14 billion FY 2008 appropriation. The insufficiency results directly from the Administration’s inadequate budget requests; never did the Administration clarify to Congress that it was changing its policy to request funding only to take all contracts through the end of the fiscal year, rather than the one-year contract term previously funded. This article reviews recent developments.