Government Shutdown Impacts HUD, RD, and Treasury Departments – Likely to Continue Into the New Year

CARH Broadcast Email—Legislative and Regulatory Alert

December 27, 2018

As CARH members know from news reports over the last several days, Congress and the White House failed to reach an agreement on a new Continuing Resolution (CR) for Fiscal Year (FY) 2019 for those agencies that had not already received full year funding for programs and services. The last CR expired on midnight December 21, 2018.

Unfortunately, affordable housing programs administered by the United States Department of Agriculture’s (USDA) Rural Development (RD), the Department of Housing and Urban Development (HUD), and Department of Treasury are all impacted. Those agencies are now in a shut-down mode. This is the third shut-down of the government in the last twelve months. Currently, only personnel in the impacted agencies that are deemed essential can work. The longer the shutdown lasts, that number will further decrease.

In the past, when a budget agreement is finally reached, impacted employees received retroactive pay and programs that have had a temporary halt also receive retroactive funding. This would include RD’s Section 521 Rental Assistance, as well as HUD’s Section 8 payments. We suggest that you post a notice at your site to advise your residents as to the current status of the governmental partial shutdown, and that federal benefits may be impacted by the shutdown. You should provide the contact phone and email information for your local Senator or Representative’s office if they wish to support restoring funding. Click here for contact information for your Senator and click here for contact information for your Representative.

Negotiations among the leadership in the House, Senate, and White House resumed today after a break for Christmas. While it is certainly possible that an agreement could be reached, speculation is that it will not be until after the new Congress convenes on January 3, 2019, and Democrats take control of the House of Representatives. Both HUD and RD have issued the following instructions on how agencies and programs are to function during this time period. For HUD, HUD Contingency Plan for Possible Lapse in Appropriations and for RD, Rural Development Plan for Operations in the Absence of Appropriations.

Currently, HUD, RD, and Treasury staff cannot return phone calls or emails. However, we suggest if you have an urgent matter that you send an email to the appropriate staff and copy the national CARH office. This will at least document the urgent matter and that way we can try to follow-up after agreement is reached.

If you have a closing scheduled, you have already heard about the status, but as a general matter, closings will need to be rescheduled after the new funding agreement is in effect. USDA has announced that RD’s housing loans and grants would not be provided during the shutdown. The USDA guidance as to Section 521 Rental Assistance is that obligated funds will continue to be disbursed but anything further will not be processed. HUD instructions note that FHA multifamily closings with Firm Commitments (and Final Endorsements with critical deadlines) will continue, as will payments under appropriated rent subsidy contracts and, where available, advanced appropriations. But any new funding will not be available and staff to process will not be available, except for emergency health and safety issues.

CARH will continue to urge members of Congress, both current and members of the 116th Congress to pass a budget that will reopen the agencies impacted by the shutdown. Broadcast emails will continue to be sent on the subject. In addition, there will be considerable discussion regarding the budget at CARH’s Midyear Meeting, which will be held on January 28-30, 2019, at Ocean Reef in Key Largo, Florida.

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