On Tuesday, April 28, the House Appropriations Committee released its draft funding bill for transportation, housing and urban development programs for fiscal year 2016; the Senate’s version of this bill will likely be released in late May. Nearly all of the proposed funding levels for HUD’s affordable housing programs in the House bill were below the Obama Administration’s budget request.

The most concerning proposed funding level was for the Project-Based Section 8 program (PBS8). The House Appropriations Committee has targeted $10.27 billion for the entire program in FY 2016, and it is unclear how much of this topline figure would be used towards PBS8 contract renewals. This proposed funding level is below the Obama Administration’s request of $10.54 billion specifically for PBS8 contract renewals, and is also far below HUD’s previous estimates to renewal all contracts up-front for a full 12-months.

Due to the transition of all PBS8 contracts to a calendar year funding model, wherein all contracts would be funded on January 1 rather than their individual renewal date, HUD must fully fund each PBS8 contract on the same day for their full 12-month term. NAHMA is concerned that $10.27 billion will be insufficient to renew all PBS8 up-front on January 1, and that the resulting funding shortfall could lead to major issues in the program such as mortgage defaults and residents losing their homes.

NAHMA is requesting that you contact your House Representative and urge him or her to reject any appropriations measure which could cause defaults and tenant dislocation in the PBS8 program. We believe that the true cost of the program is 12.4 billion dollars under the former funding model when contracts were funded on their anniversary date – this figure includes an accruing shortfall that increases each fiscal year when HUD receives insufficient funding for PBS8 and must short-fund contracts. However, the current fiscal challenges faced by Congress cannot accommodate such an increase. Therefore NAHMA is requesting that members urge lawmakers that under no circumstance may the funding for PBS8 contract renewals fall below $10.8 billion in FY 2016 under the calendar year model.

During your call, or within your email message to your Representative’s office, it is important to remind him or her that:

  • The Project-Based Rental Assistance (PBRA) program serves 2.11 million residents in 1.2 million households through 17,300 private contracts
  • 76 %  of the total residents served fall under the extremely low-income bracket (less than 30% of the AMI). Average household income is 22% of the area median income (AMI) or $11,639 average nationwide
  • Elderly persons comprise 47% of the PBS8 population while 33% is non-elderly persons with disabilities, and 26% are headed by females with children

Again, we ask that you call or email your House Representative to request that the PBS8 funding for contract renewals in FY 2016 may not fall below $10.8 billion.