Federal Financial Assistance Freeze Excludes Rental Assistance
By January 28, 2025, at 5:00 p.m. ET, all federal agencies must temporarily pause “all activities related to obligation or disbursement of all ‘federal financial assistance.” For the purposes of this memo, federal financial assistance includes: Types of assistance listed in subsection (1) and (2) of the term’s definition at 2 CFR 200.1 and assistance received or administered by recipients or subrecipients of any type except assistance received directly by individuals. This mandate is at the center of an Office of Management and Budget (OMB) memorandum to all heads of executive departments and agencies in the Trump Administration.
Housing Programs Could Be Impacted
Because federal housing subsidy and assistance programs through the Departments of Housing and Urban Development (HUD), Agriculture or the Treasury do not have an explicit exemption (i.e. exemptions for Medicare and Social Security benefits), related housing provider payments are at risk, including HUD Housing Assistance Payments (HAP) for Section 8 Housing Choice Voucher recipients.
The memo and its accompanying Instructions for Federal Financial Assistance Program Analysis in Support of M-2513 directs federal agencies to perform a comprehensive program analysis for any program that has funding or activities planned through March 15 and submit this information for approval by OMB by February 7, 2025. Even before completing this analysis, federal agencies must immediately identify any legally mandated actions or deadlines for assistance programs arising while the pause remains in effect. But, as housing assistance payments are in jeopardy, there are presently few political appointees installed at relevant agencies to make these requests known. Rental housing providers should prepare for financial impacts that may take time to resolve.
NAA Takes Action
NAA is exploring all avenues to protect the industry from the financial impacts of this executive action. We agree with the sentiments in President Trump’s Memorandum on Delivering Emergency Price Relief for American Families and Defeating the Cost-of-Living Crisis, which direct federal agencies to take appropriate actions to lower the cost of housing and expand housing supply. We believe an exemption to the OMB directive for federal housing assistance programs would be consistent with presidential priorities. In partnership with a broad coalition of real estate organizations, we are making that case both to the Administration and Congress.
Update (1/28/2025)
According to questions and answers released from OMB, "funds for small businesses, farmers, Pell grants, Head Start, rental assistance, and other similar programs will not be paused."