HUD Shortfall and Its Impact on Housing Programs
What ICMS providers need to know about recent HUD funding reductions, which programs are affected, and how to support participants during this pause in new voucher issuance and referrals.
Understanding Reserve Recapture and the LA County Housing Shortfall
Last Updated: March 14, 2025. This page will be updated as new information becomes available.
Reserve recapture occurs when HUD reclaims unused or excess funds from Public Housing Authorities (PHAs) to redistribute resources across the Housing Choice Voucher (HCV) program. These reserves, originally designated for rental assistance payments, may be recaptured when HUD determines that PHAs have unspent funds or when broader budget adjustments are necessary to address funding gaps nationwide.
This process is often used to balance the federal housing budget, stabilize underfunded regions, or respond to economic shifts affecting housing demand.
Important Note: In LA County, recent HUD recaptures and funding reductions have led to a shortfall for local PHAs, including HACLA and LACDA. As a result, both agencies have paused issuing new vouchers and accepting new referrals for several tenant-based programs, directly impacting ICMS participants. The sections below outline the key changes and next steps to help case managers navigate this evolving situation.
What Programs Are Affected by the Shortfall?
Important Note: Both HACLA and LACDA have informed DHS that they will no longer accept new referrals or issue new vouchers for the following tenant-based programs. This pause also restricts participant mobility from Project-Based Voucher (PBV) units to Tenant-Based Vouchers (TBVs). Participants who were planning to transfer from a PBV to an HCV will no longer be able to do so at this time.
Homeless Vouchers
New referrals and voucher issuance paused for both HACLA and LACDA.
Tenant-Based Supportive Housing (TBSH)
New referrals and voucher issuance paused for both HACLA and LACDA.
LAUSD Housing Program
New referrals and voucher issuance paused for both HACLA and LACDA.
Non-Elderly Disabled (NED) Vouchers
New referrals and voucher issuance paused for both HACLA and LACDA.
Family Unification Program (FUP-FYI) Vouchers
New referrals and voucher issuance paused for both HACLA and LACDA.
Stability Vouchers
New referrals and voucher issuance paused for both HACLA and LACDA.
HCV General/Veteran Housing Vouchers
New referrals and voucher issuance paused for both HACLA and LACDA.
Project-Based Vouchers (PBV)
New referrals paused. Additionally, participant mobility from PBV units to Tenant-Based Vouchers (TBVs) is no longer permitted at this time.
Mainstream Vouchers
New referrals and voucher issuance paused for both HACLA and LACDA.
HoH-HoH Care (HoH) Program
New referrals and voucher issuance paused for both HACLA and LACDA.
Moderate Rehabilitation Program (MRP/MHM)
New referrals and voucher issuance paused for both HACLA and LACDA.
Housing Opportunities for Persons with AIDS (HOPWA)
New referrals and voucher issuance paused for both HACLA and LACDA.
Mainstream Vouchers
New referrals and voucher issuance paused for both HACLA and LACDA.
Community Choice Demonstration Program
New referrals and voucher issuance paused for both HACLA and LACDA.
What Happens to Applications Already Submitted?
Note: The following information applies to FHSP applications that have already been submitted to Brilliant Corners before the pause.
HACLA Applications
HACLA will continue to process FHSP applications already submitted for General/Veteran Housing Vouchers, Project-Based Vouchers (PBV), Tenant-Based Vouchers (TBV), HoH Care (HoH) Program, and Moderate Rehabilitation Program (MRP/MHM).
LACDA Applications
LACDA will continue to process FHSP applications already submitted for Project-Based Vouchers (PBV), HoH-HoH Care (HoH) Program, Moderate Rehabilitation Program (MRP/MHM), Housing Opportunities for Persons with AIDS (HOPWA), Mainstream Vouchers, and Community Choice Demonstration Program.
Important Note: Please contact your program manager for assistance with submitting these requests.
Next Steps for Case Managers
Do Not Submit New Referrals for Paused Programs
Both HACLA and LACDA will no longer accept new referrals or issue new vouchers for the affected tenant-based programs listed in the Affected Programs tab. Do not submit new referrals for these programs until further notice.
Support Participants Who Still Need Housing
The RHS Housing Navigation team will distribute unit listings to case managers for participants who still need housing, including available units at the Lower St. Master Leasing Project and other vacancies listed on Padmission.
Submit FHSP Applications for Already-Matched Participants
If a participant has already been matched and you need to submit an FHSP application, follow the standard submission process and contact your program manager for assistance.
Note the PBV to TBV Mobility Restriction
Participants who were planning to transfer from a Project-Based Voucher (PBV) unit to a Tenant-Based Voucher (TBV) will no longer be able to do so at this time. Update care plans accordingly and discuss this change with affected participants.
Reach Out to Your Program Manager
If you have questions about a specific participant’s situation, voucher status, or housing navigation options during this pause, contact your program manager for further guidance.
What Is Not Affected by the Shortfall?
FHSP (Flexible Housing Subsidy Pool)
The FHSP program has not been impacted by the shortfall. FHSP referrals and voucher issuance continue as normal at this time.
Existing Voucher Holders
Participants who already have an active voucher in hand are not affected by this pause. Case managers should continue to support these participants in their housing search and placement efforts.
Note: DHS and RHS have not been informed of additional funding reductions beyond the current limitations on federal housing vouchers. DHS will continue to update this page as new information becomes available. If you have questions, contact your program manager.