The Northern Marianas Housing Corp. stands to lose $198,683 or 6 percent in annual funding for the Section 8 Housing Choice Voucher Program in fiscal year 2013 as a result of across-the-board federal budget cuts.
This translates to a minimum of 18 families with rents between $900 and $1,000 likely to be impacted by the sequestration. Agency officials, however, assured yesterday that NMHC has set aside reserves and began as early as January implementing “mitigating strategies” to lessen the impact of budget cuts without having to remove clients under the HCV program.
The Commonwealth's key provider for housing, mortgage, and community development programs relies on the U.S. Department of Housing and Urban Development for funding.
HUD assistant secretary Sandra Henriquez, in a March 7 letter to NMHC and other public housing agencies nationwide, said the sequestration resulted in a 94.1 percent proration for HCV renewal funding and a 68.5 percent administrative fee proration, which could cause “major challenges” in the management of HCV programs.
Given the sequestration cuts that took effect on March 1, HUD has asked PHAs in February to take measures to cope with the funding cuts.
“The last thing our agency wants to do is remove families from the program. Therefore, it is incumbent upon NMHC to ensure that all mitigating measures have been instituted and exhausted before we resort to attrition,” said corporate director Jesse Palacios.
As part of its strategy, NMHC temporarily stopped issuing vouchers and approving unit-transfers, port-outs, and landlord rent increase requests starting January, said Program and Housing Division manager Kimo Rosario. To date, the agency has eight available vouchers out of the 363 vouchers NMHC is allowed to issue.
Rosario noted that NMHC has used only 99 percent of its budget, which means that it only has to cover 5 percent instead of the 5 percent funding cut due to sequestration. “We did not want to overspend as [that] will result in adverse HUD sanctions against our PHA,” he told Saipan Tribune.
NMHC also strengthened enforcement efforts, terminating program participants engaged in repeated or serious violations and recovering funds improperly disbursed, he added.
Rosario emphasized that the agency is in “excellent financial standing” given its fiscal conservatism and good business practices, and has set aside administrative reserves to cushion the impact of the federal budget cuts.
He said NMHC has been in constant communication with its HUD field office representative, Darlene Kaholokula, who has advised the local housing agency to wait for the next approved federal budget before issuing any more vouchers.
“HUD has definitely been of great help to us,” added Rosario.