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Impact of Federal Funding

The Housing Choice Voucher Program provides housing subsidizes to 2.2 million low-income households in the country. HCVs are tenant-based subsidies provided by HUD and administered by a local Public Housing Agency. The rental subsidies are used by families for standard-quality units that are chosen by the tenant in the private rental market.

Congress appropriates funds for the Voucher program annually. In some years, Congress provides sufficient funds to renew all vouchers and may even fund small numbers of new vouchers. In other years, Congress appropriates insufficient funding for PHAs to renew all vouchers. In these years, PHAs may lose vouchers to attrition and in extreme cases, may be forced to terminate families from the program.

Funding formulas for the voucher program are based on PHA expenditure and utilization of funds in the previous year, with some adjustments. When Congress does not appropriate sufficient funds, PHAs receive a prorated amount of funds to run their voucher program. PHAs respond to such cuts in a number of ways including by altering the size of their program (number of vouchers under lease) or changing the cost per unit (e.g. by changing the payment standard).

Funding in 2017 was insufficient to renew all vouchers currently in use. PHAs received 97.5% of the funding they would need to renew all vouchers in use (a 97.5% proration). HUD identified PHAs that were likely to experience a shortfall and sent a letter to those PHAs requiring them to take immediate steps to qualify for additional shortfall funding from HUD and avoid terminating current participants. Below are materials for advocates working in jurisdictions that experience a funding shortfall.

NHLP drafted this Memo to HJN Members on 2017 shortfall funding to help advocates navigate the response by PHAs to funding cuts. Along with the Memo, NHLP provided a chart: Possible Strategies to respond to the Effects of Funding Shortfalls in 2017 that lays out policy solutions that will have the least to most negative impact on tenants.