Rental assistance for multifamily properties is reportedly exempt from President Donald Trump’s federal funding freeze, which was set to kick in Tuesday at 5 p.m. ET and touched off a wave of confusion. The order was swiftly met by a stay from a federal judge.
A directive to freeze all government aid pending review threatened to upend state housing programs.
The directive from the Office of Management and Budget sent shockwaves from Washington, D.C., to state capitals around the county. With confusion ascendant, the Trump administration made attempts to quiet some fears Tuesday.
Administration officials and the OMB released statements that pared back the language of the initial funding freeze, exempting large amounts of spending from review, including rental assistance payments and other commercial real estate funding.
“It is expressly limited to programs, projects, and activities implicated by the President’s Executive Orders, such as ending DEI, the green new deal, and funding nongovernmental organizations that undermine the national interest,” the White House budget office said in a new document released amid Tuesday’s disorder.
A federal judge stepped in to block the order less than an hour before it went into effect at 5 p.m. ET Tuesday. U.S. District Judge Loren AliKhan, who was appointed by Joe Biden, said the directive presented “the specter of irreparable harm” and suspended its enforcement until Feb. 3.
The original directive, issued late Monday by OMB Acting Director Matthew Vaeth, said all federal grants, loans and assistance would be subject to an “across-the-board” funding freeze while the administration reviewed the programs to ensure that they were “consistent with the president’s policies and requirements.”
“The use of federal resources to advance Marxist equity, transgenderism and Green New Deal social engineering policies is a waste of taxpayer dollars that does not improve the day-to-day lives of those we serve,” Vaeth wrote in the memo.
As state agencies struggled to understand how they would be impacted, the White House rushed to clarify its position.
The Department of Housing and Urban Development released a statement late Tuesday saying that it had confirmed with the OMB that, even if the funding freeze goes into force, all rental assistance programs would remain operational and continue to receive federal funding. The new guidance, however, did not explicitly define rental assistance.
“We anticipate that, in the coming days, the White House will clarify not only what housing programs are affected by the OMB's order but also how long any funding pauses for affected programs will last,” Sharon Wilson Géno, the president of industry trade group National Multifamily Housing Council, said in a private member email obtained by Bisnow.
White House Press Secretary Karoline Leavitt also told reporters during a briefing Tuesday that programs offering individual assistance, such as Social Security, Medicare and food stamps, would not be impacted.
Still, the federal government could deny state and local government the resources needed to carry out real-estate-related obligations under the order, the National Low-Income Housing Coalition said in a statement. While the OMB said rental assistance would be exempt, the freeze could impact funds for improving infrastructure or new affordable housing construction.
“Even a short pause in funding could cause significant harm to low-income families and their communities,” NLIHC Interim President and CEO Renee Willis said. “The longer the freeze continues, the greater the risk that low-income households receiving federal rental assistance could face eviction, and in the worst cases, homelessness, homeless shelters may be forced to close their doors, and nonprofit organizations may have to lay off staff.”
Local officials across the country were grappling with the funding freeze Tuesday before the order blocking it offered a temporary reprieve.
“America’s mayors are deeply concerned by the Trump Administration’s sweeping freeze of federal funding for grants, loans and other critical assistance programs,” Andrew Ginther, the mayor of Columbus, Ohio, and the president of the U.S. Conference of Mayors, said in a statement.
“We are seeking clarification from the Administration on the scope of the freeze and are determined to use the full force of this organization to protect the funding that Congress allocated — funding that has contributed to the health and vitality of our cities for decades.”
Ryan Wangman contributed reporting.
CLARIFICATION, JAN. 28, 11:30 P.M. ET: This story has been updated to reflect NMHC's statement came from a private member email.