The government shutdown, which entered its 26th day on Wednesday is beginning to affect those housed through the U.S. Department of Housing and Urban Development (HUD), as well as independent landlords who are working with government employees unable to pay their rent.
While none of the 1,175 rental contracts that have not been renewed by HUD due to the shutdown are likely to affect low-income tenants, according to the National Housing Conference (NHC), this could change if the shutdown extends past February. NHC said that HUD staff was working with landlords across the country to ensure this does not happen. Additionally, contracts were being paid with available funds, and landlords were being told to use their reserves to cover operating expenses.
"Every day the stalemate continues, pressure increases on both the White House and Congress to reach a settlement," said David M. Dworkin, President and CEO of NHC. "So there is no guarantee that the government will still be shut down in February, but we are in uncharted water and anything is possible."
Yet, according to The National Association of Independent Landlords, without the rent payments, independent landlords are finding themselves unable to cover their own expenses such as mortgages, repairs, utility bills, and insurance. Many of these landlords are small investors who "own a property or two and have mortgages they've got to pay every month regardless of whether they get paid," according to Tracey Benson, the association's President.
According to NHC, there are also 800,000 federal government employees who are furloughed or working without pay who will have to make their first rent or mortgage payment without a paycheck on Feb. 1 – two weeks from now.
It said that these workers and federal contractors were not at a risk of foreclosure due to failure to pay their mortgages during the shutdown. "All workers and contractors are urged to call their mortgage servicer," the NHC recommended. "Government employees and contractors aren’t going to face their first payment without a paycheck until February 1. FHA, Fannie Mae, and Freddie Mac have told their mortgage servicers to treat these homeowners like victims of a natural disaster."
Read more about how servicers are assisting federal workers: