Editor’s Note: The funding freeze was rescinded on Jan. 29. Read more here. This story was last updated on Wednesday, Jan. 29, at 11:40 a.m.
Just as President Trump’s order to freeze federal funding was scheduled to take effect on Tuesday, Jan. 28, U.S. District Judge Loren AliKhan temporarily blocked the decision. The freeze on funds that have already been appropriated has been delayed until Feb. 3.
The freeze quickly met with widespread opposition, including lawsuits. Challengers say the move was not only disastrous for American families, but an illegal overreach restricting funds that have already been appropriated.
Before AliKhan’s order to delay, NPR reported that the administration claimed that the pause could be as short as a day if an agency provided the requested reports that quickly on how its programs align with the president’s recent executive orders. It remains unknown, however, how the Office of Management and Budget (OMB) would evaluate said reports, and whether the administration could try to circumvent the legislative or rulemaking process by demanding changes in order to get federal funding flowing again. (OMB and HUD did not return requests for comment to Shelterforce.)
For much of Tuesday there was widespread uncertainty about just which programs were affected. “So far, we’re still waiting on notification from HUD,” said Kevin Smith, executive director of the Texarkana Housing Authority in Arkansas, early Tuesday afternoon. “We need to find out what programs they’re freezing and what ones they’re not.” Both the Council of Large Public Housing Authorities and the Public Housing Authorities Directors Association issued statements calling for more clarity. Later in the day OMB clarified that rental assistance payments were not covered by the pause.
Nonetheless, before the decision was delayed, several PHAs and homelessness services nonprofits reported to other outlets, and to Shelterforce, that they were locked out of the federal payment processing system eLOCCS as of Tuesday, Jan. 28, even though the order was not supposed to take effect until 5 p.m. EST that day. This meant they had effectively lost access to their federal funds for all programs already.
In all the uncertainty, one thing was very clear—timely federal payments are crucial for preventing a wave of homelessness across the country, and even temporary threats to that system could have wide-ranging effects.
Before the order was paused, the housing and homelessness service providers worried that the freeze would mean residents wouldn’t make rent the following week. “Realistically, I don’t know our agencies would be able to pay people’s rent for Feb. 1,” said Courtney Guntly, CoC director of the Iowa Balance of State Continuum of Care, which disburses federal funds to homelessness service providers across the state outside of larger cities, and was also locked out of eLOCCS. “Some agencies may have paid it in advance, but I can guarantee not everyone did.” She predicted a lot of eviction filings coming in if that were to happen. “I don’t know if our landlords will be open to being that patient with us.”
Derek Antoine, executive director of Knox County PHA in Illinois, said his fellow directors of public housing authorities were spread along the spectrum of “slightly concerned to panic.”
He noted that most of his agency’s reserves were restricted by federal regulations so he couldn’t use them to make up voucher payments. Some smaller reserves would be available, he said, so “we can withstand a little of this, but not a lot. So hopefully they get things resolved very quickly and the business of housing people can go on.”
Smith from Texarkana acknowledged that if the freeze had affected voucher payments it would have started eating into reserves quickly. He figures they could keep people housed for about a month and “that would be it.”
Though it seems Section 8 is exempt, there’s still no clarity, however, about how many other kinds of housing-related payments will be affected by the freeze if it recommences on Feb. 3. Despite the judge’s order blocking the freeze, researchers with grants under HUD’s Hispanic Serving Institutions (HSI) Research Center of Excellence grant program received emails at 5:05 ET Tuesday telling them to cease all work on their grants, “to ensure compliance with OMB Memo M-25-13 which calls for the temporary pause of agency grant, loan, and federal financial assistance programs. Under this new directive, HUD is pausing reimbursement for existing vouchers while the Agency undertakes a comprehensive review. Once we are authorized to resume grant activities, we will notify you via email.”
Agencies serving the homeless, including those with contracts with Veterans Affairs, received emails Tuesday saying their contracts were paused, according to The New York Times.
“In Iowa we’re pretty dependent on that federal funding,” said Guntly. “Without access to those federal dollars, there really is no homeless support system anymore.”
Has your organization’s work, research, or technical assistance been affected or threatened by the potential funding freeze? Tell us about it at [email protected].
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Here in Tucson, Arizona I am a disabled Veteran with two toddlers. Their Mother took off and left us in a predicament. I went through the VA HUD/VASH program to acquire housing. I received a dreaded text from my landlord last night that he hadn’t received payment. I stumbled across this article in researching possible causes stemming from the Federal Freeze. I don’t know what we will do if our landlord asks us to leave? I have zero cash flow and nowhere to even put our possessions if we had to vacate. We were homeless for 9 months leading up to our placement here. That was when my best friend still has his 2 bedroom house and could shelter us. He has since downsized leaving us no safe haven or fallback plan. We are basically in a worse situation than originally first being displaced. We’ll be on bended knee praying for a resolution. I just lost my Father in the 28th of January. I’m still trying to process that. Now I’m faced with being displaced once again with two toddlers in tow. I’d be lying if I told you I’m not the least but worried. God Bless each and every person negatively affected by this. DOGE has to be a 3 dimensional process, capable of complex thought. Otherwise, innocent people will be harmed in the process.