Congress Considers Solutions for Project-Based Section 8 Funding Crisis

This NHLP Housing Law Bulletin article is from April-May 2008. For an undetermined amount of time prior to late 2007, HUD had been renewing contracts for one year, but dividing the necessary funding among two fiscal years: allocating some funds from the applicable year’s appropriation, but only enough to carry the property through the end of that fiscal year, and then “backfilling” the remainder of the one-year contract term that ran into the subsequent fiscal year with the next year’s appropriated budget authority. Although HUD has still not issued a required finding on whether this prior practice in fact violated the Anti-Deficiency Act, as required by the Act and by the FY 2008 Appropriations Act, it has proceeded to “short-fund” all project-based contract renewals. This article reviews the risks that lie ahead due to this policy.