Orhan Cam
This first package covers about a quarter of funding for government agencies – including HUD – and is the first real progress toward resolving the funding for FY2024. The second set of funding bills may prove to be more difficult given they include funding for the Defense Department, Homeland Security, and social programs operated through the Health and Human Services Department which, under the current continuing resolution, are set to shut down on March 23.
With the first deadline for government funding looming, NMHC continues to urge Congress to take action to fund the government and avert the potentially devastating impacts a long government shutdown would have on housing providers, our residents, and the entire economy. As we know from years past, a government shutdown could severely and negatively impact the economy, as well as several different sectors with the apartment industry. For example, during the long-term government shutdown of 2018/2019.
- HUD housing voucher program were disrupted;
- FHA loan program disbursements were interrupted;
- National Flood Insurance Program (BFIP) policies were halted impacting financing and development deals; and,
- EPA development permits slowed.
What We're Watching
To avoid a government shutdown, the Congress now has until March 8th to reach an agreement on six appropriations bills, including Transportation, Housing and Urban Development and related agencies (THUD), and until March 22nd for the remaining six appropriation bills.
What's At Stake
As mentioned, there are a host of critical housing programs caught up in this government funding dilemma.
National Flood Insurance Program (NFIP)
- Residential, commercial, and rental property owners currently insured by NFIP would be unable to renew their policies or purchase new ones, which is required when utilizing any federally backed mortgage product.
- Without access to the NFIP, property owners of all kinds, including millions of American families, would be forced to rely on severely limited or cost-prohibitive private market flood insurance products or, worse, federal disaster aid.
- National Flood Insurance Program (NFIP) Congressional Reauthorization Guidance
United States Department of Housing and Urban Development (HUD)
- FHA Multifamily finance programs would be unavailable during a government shutdown, resulting in fewer affordable options—further impacting an already tight housing market.
- Section 8 Program payments, inspections, and income verifications could be delayed preventing HCV holders from securing and moving in to the housing they need.
- HUD Frequently Asked Questions (FAQs) in the event of a Government Shutdown
Loan Processing Delays
- Social Security and employment verifications necessary to process loans, could be delayed impacting rental housing provider operations and deals.
- Social Security Administration Contingency Plan
Environmental Protection Agency (EPA) Programs
- EPA certifications and permitting could be postponed or delayed impacting progress on development and preservation projects.
- US Environmental Protection Agency Contingency Plan for Shutdown
What's Next
If the FY24 THUD bill or another short-term extension is not passed on March 8th, then HUD and NFIP shuts down. If the FY24 Interior bill or a CR is not passed by March 22, then the EPA shuts down. If a FY24 Labor-HHS bill or a CR is not passed by March 22, then the Social Security Administration shuts down. If a CR is passed and in place on April 1, then all Federal spending receives an across the board cut of 1% below FY2023 levels. OMB would have a 4/30/2024 deadline for setting new funding levels. The spending levels for all domestic discretionary spending under an across-the-board cut will be $736.5 billion for FY2024 and FY2025. To encourage budget hawks in Congress to negotiate, spending cuts will be bigger if Congress passes appropriation bills. Specifically, Congress only has allocations of $703.6 billion for FY2024 and $710.7 billion for FY2025 for domestic discretionary spending. So, HUD’s, NFIP’s, and EPA’s budget are bigger under a sequester prompted by a CR than it would be under Congressionally passed FY2024 appropriations bill.
