News Flash - Section 8 Housing Authorities Breaking Point! HUD Defunds Low Income Housing Vouchers!

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In essence, “HUD Published Guidance for PHAs Implementing Cost-Savings Measures in the Housing Choice Voucher Program a.k.a. Section 8 voucher program, and Project Based Voucher Programs,” and sent it out to around 3,300 PHA’s all across the nation.

This may result in, PHA’s “Denying Portability and Moves within the PHA Jurisdiction – in some instances, PHAs may deny requests from families receiving tenant-based assistance to move, if the PHA lacks sufficient funding.

That’s right. In the United States of America, freedom is just another word, and something left to lose when it turns out that being a HUD subsidized housing tenant, one may end up being restricted from moving to another location with their Section 8 hosing choice voucher.

Additionally, it may result in the following changes below for HUD’s subsidized housing tenants, including Section 8 voucher tenants, and tenants in Section 8 Project Based Voucher housing units.

1) Reducing or Stopping Voucher Issuance to Applicants – Housing agencies may decide to reduce or stop issuing turnover vouchers to new applicants.

2) Increasing the Minimum Rent – Housing agencies may increase the minimum rent up to $50. Moving to Work agencies may exceed this among with an approved waiver.

3) Stopping Portability Absorption – A receiving PHA may elect to stop absorbing new portable families and elect to bill the initial PHA.

4) Reducing Subsidy Standards – Housing agencies may revise subsidy standards that exceed minimum HUD requirements to reduce voucher size eligibility, though HCV or PBV units must still have at least one bedroom or living/sleeping room per two people.

At this point, there’s no telling when HUD’s subsidized housing tenants may receive a notice about HUD telling Public Housing Authorities (PHA’s) to prepare for funding shortfalls, or how this may effect any individual subsidized housing tenant, or family.

Apparently things are so bad, “HUD has indicated that nearly 50% of public housing authorities administering Section 8 programs across the country are also experiencing funding shortfalls. To aid agencies, HUD established a nationwide $200M shortfall fund.”

Reportedly, “during this past week, the Department of Housing and Urban Development (HUD) released two notices that concern cost saving measures for the Housing Choice Voucher program and Section 3 reporting procedures, respectively. These are the first notices published since the government shutdown ended.

Notice PIH 2025-28 https://www.hud.gov/sites/dfiles/OCHC... - summarizes actions that HAs in shortfall or at risk of shortfall can undertake to reduce program costs. It also includes information on Admin Plan compliance when HAs are forced to terminate assistance for currently assisted voucher families.

Notice PIH 2025-29 https://www.hud.gov/sites/dfiles/OCHC... - establishes Section 3 report submission requirements for public housing financial assistance (Capital Fund and Operating Fund only). The notice requires reporting on 2025 Section 3 performance metrics in 2026 based on fiscal year end. The notice references a successor Section 3 Reporting System that was to be deployed in September 2025 but is not yet available. For a review of the Section 3 Final Rule, see PHADA’s one-pager, “Section 3 Final Rule.” - https://www.phada.org/Portals/21/pdf/...

Reportedly, according to the National Association of Housing and Redevelopment Housing Officials (NAHRO), “November 19, 2025 – Earlier today (though the notice is dated November 17, 2025), HUD published a notice titled “Cost-Savings Measures in the Housing Choice Voucher (HCV) and Project Based Voucher (PBV) Programs” (Notice PIH 2025-28). The notice provides a list of options that PHAs may take to reduce Housing Assistance Payment (HAP) expenses to prevent shortfall scenarios in the HCV program. While this notice applies to Moving to Work (MTW) agencies, MTW agencies are also “encouraged to evaluate approved MTW activities for possible cost savings . . . .”