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Section 8 Housing Subsidy Payments Running Late
The Department of Housing and Urban Development is once again behind on paying subsidies to owners of Section 8 project-based properties.
As of the middle of this month, many owners had not received Housing Assistance Payments for July, and HUD expects payments to be late for August as well.
HUD field offices are advising owners to use reserve funds to cover the shortages, but that is not always permitted by lenders, leaving some owners with few options to cover costs. HUD field offices have been instructed to process owners’ requests for reserve withdrawals within 24 hours.
HUD currently is operating under a Continuing Resolution (CR) for the remainder of FY 2007. Under a CR, funds are apportioned to HUD by the Office of Management and Budget (OMB) based on a formula related to HUD’s spend-out rate in the previous year. However, the formula is not always accurate because HUD’s spending fluctuates. It takes HUD up to three weeks to move funds from OMB to owners.
Compounding the problem, HUD may not have asked for sufficient funds from Congress in FY 2007, raising the possibility that it may have to ask Congress for an additional appropriation. HUD currently is auditing all HAP contracts to determine funding needs. Members of Congress have been in contact with the HUD secretary, who has assured them that HUD is working to resolve the issue.
For more information, view click here; or e-mail Claudia Kedda at NAHB, or call her at 800-368-5242 x8352.
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