Dealing with Federal Immigration Agents at Apartment Communities

Effects of Potential Staffing Cuts on HUD Programs

As the Trump administration moves forward with plans to reduce the federal workforce dramatically, the Department of Housing and Urban Development (HUD), according to recent reporting by the Associated Press, could face potential cuts that could eliminate half of its staff approximately 4,000 positions. Widespread Impact Across Essential Services The proposed reductions would affect numerous critical HUD programs, including disaster recovery efforts, rental assistance, housing discrimination investigations, and support for first-time homebuyers. Housing advocates and former HUD officials have raised substantial concerns that these extensive staffing cuts could greatly hinder or even stop the department s ability to carry out its mission. The official HUD position is that this information "should not be considered final. However, the potential extent of these reductions aligns with the administration s broader goal of reducing government spending. Recently appointed HUD Secretary Scott Turner announced the formation of a Department of Government Efficiency task force inspired by billionaire Elon Musk, while also underscoring the identification of "$1.9 billion in misplaced funds and "$260 million in wasteful contracts. Rental Assistance Programs at Risk The proposed cuts most concerning aspect is their potential impact on the Office of Public and Indian Housing, which could lose half its workforce from 1,529 employees to just 765. This office manages rental assistance subsidies for more than 3.5 million households and supports public housing for approximately 1 million people. Georgi Banna, general counsel for the National Association of Housing and Redevelopment Officials, warns that such reductions could delay payments for the Section 8 voucher program, which provides rental assistance to millions of low-income Americans. Although tenants have certain protections as long as they pay their share of the rent, they could ultimately face displacement if landlords withdraw from the voucher program due to payment issues. Budget Challenges Compound the Problem The potential staffing cuts come at a particularly challenging time as Congress continues to navigate a contentious appropriations process for HUD programs. The House version of the spending bill would boost funding for Housing Choice Vouchers by $115 million, which sounds promising but falls far short of the estimated $4.3 billion increase needed to simply maintain current service levels, according to the Center on Budget and Policy Priorities (CBPP). If the House budget is approved, it will only meet 90% of the need, potentially causing about 283,000 households to lose voucher access what the CBPP has described as the "most severe funding shortfall in the history of the voucher program. The situation has already caused damage, with some voucher-administering agencies halting the distribution of new vouchers. Local housing authorities have been operating on constrained budgets, and many lack robust reserves to weather a potential government shutdown or significant funding cuts. Fair Housing Enforcement Under Threat Perhaps the most alarming aspect is the proposed 77% reduction in the Office of Fair Housing and Equal Opportunity, which could shrink its staff from 572 employees to only 134. As HUD s main enforcer of national fair housing laws, this office investigates discrimination complaints and works to ensure equal access to housing. Although Secretary Turner has previously committed to upholding the Fair Housing Act, which includes a statutory mandate for HUD to combat discrimination, the administration s approach to implementing the law may undergo significant changes. Turner recently announced on social media that HUD had canceled $4 million in diversity, equity, and inclusion contracts. Uncertainty for Housing Authorities and Vulnerable Populations Potential staffing cuts and budget uncertainties have come together to create a tumultuous situation for local housing authorities. Housing authorities are finding it difficult to provide clear guidance to both families and landlords while anticipating potentially "draconian consequences if significant cuts or a government shutdown happen. The months ahead may pose unprecedented challenges and uncertainty for millions of Americans relying on HUD programs for stable housing, especially those using Section 8 vouchers. As Congress decides whether to pass a bill keeping the government open, the future of these critical housing programs and the millions of Americans who rely on them hangs in the balance. In conclusion, the proposed staffing cuts at HUD pose a significant threat to the stability and effectiveness of critical housing programs that serve millions of Americans. If carried out, these reductions could disrupt essential services like rental assistance, fair housing enforcement, and disaster recovery putting vulnerable populations at greater risk of housing instability and discrimination. The potential for delayed payments, reduced voucher access, and weakened fair housing protections highlights the profound human impact of these cuts. As Congress deliberates over HUD s budget, the stakes could not be higher for the families, landlords, and housing authorities that rely on these programs for their survival and stability. The coming months will challenge the resilience of HUD s mission and the nation s commitment to providing safe, fair, and affordable housing for all. All those in the affordable housing industry must reach out to their elected representatives to stress the importance of HUD and its programs to the housing needs of America s most vulnerable populations.

A. J. Johnson Partners with Mid-Atlantic AHMA for December Training on Affordable Housing—April 2025

In April 2025, A. J. Johnson will partner with the MidAtlantic Affordable Housing Management Association for four live webinar training sessions for real estate professionals, particularly those in the affordable multifamily housing field. The following sessions will be presented: April 15: Pets/Pot/Service Animals: Navigating Fair Housing A Comprehensive 90-Minute Webinar for Housing Professionals Join us for an essential training session that tackles three of the most challenging areas in fair housing compliance today. This practical webinar will equip affordable housing providers with clear guidance on: Service and Emotional Support Animals: Learn the crucial legal distinctions between pets and assistance animals, proper verification procedures, and how to handle accommodation requests while complying with FHA regulations. Pet Policy Development: Explore effective strategies for creating and enforcing fair pet policies that address resident needs while considering property management concerns. Medical Marijuana Considerations: Explore the intricate relationship between federal and state laws concerning medical marijuana use in housing, including the requirements for reasonable accommodation. Through case studies, interactive discussions, and expert analysis of recent court decisions, you will gain actionable strategies for confidently addressing these challenging issues. This tool is perfect for property managers, leasing agents, compliance officers, and housing administrators who want to minimize legal risk while creating inclusive communities. April 16: VAWA with Tips on Communicating with Victims - The Violence Against Women (VAWA) Reauthorization Act of 2013 expanded VAWA protections to many different affordable housing programs, including the Low-Income Housing Tax Credit (LIHTC) Program. While HUD has provided detailed requirements on VAWA implementation at HUD properties, there has been no uniform guidance for LIHTC owners and managers. A proposal before Congress would legislate that LIHTC Extended Use Agreements contain VAWA requirements. The IRS has not provided guidance, and while many state agencies are requiring VAWA plans, they are not providing information on what the plans should look like. This two-hour training, when combined with the course materials, will review VAWA requirements and recommend best practices for developing VAWA plans at LIHTC and other non-HUD properties. The session will be presented by A. J. Johnson, a recognized expert in the affordable housing field and the author of "A Property Manager s Guide to the Violence Against Women Act. April 24: Preparation for Physical Inspections - Agency inspections of affordable housing properties are required for all affordable housing programs, and failure to meet the required inspection standards can result in significant financial and administrative penalties for property owners. This four-hour training focuses on how owners and managers may prepare for such inspections, with a concentration on HUD NSPIRE inspections and State Housing Finance Agency inspections for the LIHTC program. Specific training areas include (1) a complete discussion of the most serious violations, including health & safety; (2) how vacant units are addressed during inspections; (3) when violations will be reported to the IRS; (4) the 20 most common deficiencies; (5) how to prepare a property for an inspection; (6) strategies for successful inspections; and (7) a review of the most important NSPIRE Standards as they relate to the three inspectable areas [Units/Interior/Exterior]. The training will summarize the HUD Final Rule on NSPIRE with a discussion of (1) the new Self-Inspection Requirement and Reports; (2) Timeline for Deficiency Correction; (3) New Affirmative Requirements; and (4) Tenant Involvement. At the end of the training, attendees will have a blueprint they can use to prepare their properties for agency-required physical inspections, regardless of the program under which they operate. April 29: Understanding and Managing Hoarding in Residential Properties: A Fair Housing Compliance Workshop - In May 2013, the American Psychiatric Association (APA) confirmed that Compulsive Hoarding is a mental disability and a protected class. More than 15 million Americans suffer from the mental health problem of hoarding and potential problems from hoarding include noxious odors, pest infestation, mold growth, increased risk of injury or disease, fire hazards and even structural damage. Hoarding is the one class of disability that requires landlords to offer an accommodation even if an accommodation is not requested! This 1.5-hour live webinar is designed to assist multifamily managers in understanding how to deal with hoarding problems in a way that will prevent liability under fair housing law. The session will define hoarding and provide detailed recommendations on how to deal with a hoarding problem. It will outline examples of accommodations for hoarding, how to engage in the "interactive process with residents who hoard, and the steps necessary to remove uncooperative residents. Finally, a recent court case regarding hoarding will be reviewed as an illustration of the potential difficulties managers face in hoarding situations. This is an evolving area of fair housing law, and this webinar will provide the guidance necessary to approach the problem in a systematic way that will give multifamily operators the best chance at avoiding the legal traps that exist when dealing with this unique disability. These sessions are part of the year-long collaboration between A. J. Johnson and MidAtlantic AHMA and are designed to provide affordable housing professionals with the knowledge to effectively manage the complex requirements of the various agencies overseeing these programs. Persons interested in any (or all) training sessions may register by visiting either www.ajjcs.net or https://www.mid-atlanticahma.org.

Impact of Trump Administration's Regulatory Restructuring on HUD and IRS

The Trump administration's recent executive order on federal regulations, "Ensuring Lawful Governance and Implementing the President's 'Department of Government Efficiency' Deregulatory Initiative," signals significant changes for federal agencies. The order has particularly notable implications for the Department of Housing and Urban Development (HUD) and the Internal Revenue Service (IRS). The New Regulatory Framework On February 19, 2025, President Trump signed this executive order as part of a broader deregulatory agenda aimed at reducing what the administration views as bureaucratic overreach. The directive mandates that federal agencies conduct a comprehensive 60-day review of their regulatory frameworks to ensure alignment with both legal requirements and administration policies. The order targets explicitly regulations considered: Unconstitutional Based on improper delegations of legislative power Imposing excessive costs without clear public benefits Harmful to national interests Hindering development across various sectors This order is part of a series of regulatory rollbacks, including directives like "Ensuring Accountability for All Agencies" and "Unleashing Prosperity Through Deregulation," which expand upon the administration's previous deregulatory efforts. Specific Impacts on the IRS The IRS faces several significant challenges under this new directive: Continued Hiring Freeze: The executive order maintains an existing hiring freeze at the IRS, which will remain in effect until the Treasury Secretary, in consultation with the Office of Management and Budget (OMB) Director, determines that lifting it serves the national interest. Increased White House Oversight: IRS regulations will once again be subject to White House review through the Office of Information and Regulatory Affairs (OIRA), reinstating a policy from Trump's first term that adds another layer of scrutiny to IRS rulemaking. "10-for-1" Deregulation Mandate: The IRS must eliminate ten existing guidance documents for every new rule or guidance it issues, significantly constraining its ability to update tax regulations and provide new guidance. These measures could substantially impact the IRS's capacity to uphold compliance and maintain operational efficiency, potentially affecting tax administration and enforcement nationwide. Implications for HUD For the Department of Housing and Urban Development, the executive order brings equally significant changes: Comprehensive Program Review: The order requires a review of hundreds of HUD programs, potentially leading to significant restructuring or budget cuts. Grant Funding Uncertainty: Although a federal court temporarily blocked a separate memo seeking to freeze federal grants, the administration's intent to reassess HUD funding remains evident. "10-for-1" Rule Application: Like the IRS, HUD must adhere to the requirement of eliminating ten existing regulations for every new one proposed, which could significantly impact housing policy implementation and program management. These changes may affect HUD's ability to administer housing assistance programs, enforce fair housing regulations, and support community development initiatives. Legal and Procedural Challenges The administration's deregulatory push faces potential legal obstacles: Agencies seeking to rescind or modify rules must generally follow a new rulemaking process, including issuing a Notice of Proposed Rulemaking, collecting public comments, and finalizing the new rule. Failure to adhere to these procedural requirements could expose regulatory rollbacks to legal challenges under the Administrative Procedure Act (APA). The APA requires agencies to engage in reasoned decision-making when modifying or rescinding regulations, and courts may overturn agency decisions if this standard is not met. Outlook As the 60-day review period progresses, the IRS and HUD must navigate competing demands: implementing the administration's deregulatory agenda while maintaining their core functions and avoiding legal challenges. The outcome will likely reshape how these agencies operate and could have lasting implications for the United States s tax administration and housing policy. The full impact of these changes will become more evident as agencies determine which regulations to target and how to implement the administration's directives while fulfilling their statutory obligations.

Understanding the HOTMA Educational Assistance Rules

Under the Housing Opportunity Through Modernization Act (HOTMA), specific rules govern how educational assistance is treated as income for Section 8 residents. HOTMA Educational Assistance Rule Overview HOTMA clarified and simplified the treatment of educational assistance in determining a household s income for many affordable housing programs, including most HUD programs, Rural Development Section 515, and the LIHTC program. Under the HOTMA rule: Exclusion of Educational Assistance:Most forms of educational assistance, including scholarships, grants, and work-study income, are excluded from the calculation of annual income. This exclusion applies to both the student and other household members. Limited Exceptions:The only types of educational assistance that may be counted as income are: Amounts exceeding the actual tuition cost, fees, books, and other required educational expenses. Payments for living expenses (e.g., housing, food, and transportation) that are included in the educational assistance package. Student Status and Eligibility: The rule applies to both dependent students and independent students. The educational assistance exclusion is broader for students under Section 8 over 23 with dependent children and generally includes all aid except for amounts used for living expenses. HOTMA s goal in modifying these rules was to reduce administrative complexity and ensure that educational aid meant to support academic success does not create a financial penalty for low-income families participating in HUD programs. Amounts Received Under Section 479B of the Higher Education Act (HEA) of 1965 Educational assistance received under the Higher Education Act is almost always excluded from income even if it exceeds the cost of actual educational expenses. The one exception is for Section 8 residents, where the full amount of educational assistance in excess of actual expenses is included in income. The one exception to this is for Section 8 residents over age 23 with dependent children. HEA assistance is always excluded for this category of resident, as it is for residents in all other affordable housing programs subject to HOTMA. Section 479B provides that certain types of student financial assistance are excluded in determining eligibility for benefits made available through federal, state, or local programs financed with federal funds. The types of financial assistance listed below are considered 479B student financial assistance programs. Federal Pell Grants Teach Grants Federal Work-Study Programs Federal Perkins Grants Student Financial Assistance received under the Bureau of Indian Education Higher Education Tribal Grants Tribally Controlled Colleges or Universities Grant Program Employment Training Program under Section 134 of the Workforce Innovation and Opportunity Act (WIOA) Any other awards under Section 479B Other student financial assistance may also be excluded from income, but only to the extent it pays for actual educational expenses. Such assistance includes grants or scholarships from the following sources: Federal government A State (including U.S. territories), Tribe, or local government A private foundation registered as a non-profit under 26 USC 501(c)(3) A business entity (such as a corporation, general partnership, limited liability company, limited partnership, joint venture, business trust, public benefit corporation, or non-profit entity). An institution of higher education Military assistance (e.g., GI Bill) Other monetary contributions will generally not be excluded from income, and may include - Financial support provided to a student in the form of a fee for services performed (e.g., work-study or teaching fellowship) that is not excluded under Section 479B of the HEA. Gifts, including gifts from family or friends. Covered Costs Costs that may be considered educational expenses include: Tuition Books Supplies Room Board Fees required and charged to a student by an institution of higher education. Property managers operating properties subject to HOTMA need to be familiar with the various types of financial assistance students will likely receive and whether or not such assistance may be excluded from income. Bottom Line The Housing Opportunity Through Modernization Act (HOTMA) streamlines the treatment of educational assistance as income for residents receiving housing support, such as Section 8. In general, most forms of educational assistance, including scholarships and grants, are excluded from income calculations for both the student and their household members. There are limited exceptions, which include amounts that exceed tuition costs and payments designated for living expenses. This rule applies to both dependent and independent students, with more extensive exclusions for Section 8 students over 23 who have dependents. HOTMA seeks to reduce administrative burdens and ensure that educational aid does not financially penalize low-income families.