HUD Publishes a Series of Notices with Substantial Accounting Changes for Public Housing

By: Andrew Van Horn, Policy and Research Advisor

July 29, 2025—HUD has published two notices governing PHAs’ use of operating funds. PIH Notice 2025-20, “Operating fund Financial Report (SF-425) Submission Process” (dated July 9) and PIH Notice 2025-22, “Public Housing Operating Subsidy Grant Eligibility Calculations and Processing for Calendar Year 2026” (dated July 17) each add substantive, new requirements.

When taken together with PIH 2025-14 and 2025-17—also published earlier this year—HUD is implementing a more complicated accounting system for public housing. The notices direct the order in which funds are spent, threatening PHA reserves; the timing of using grant funds; reporting on and return of these funds; and the certifications PHAs will have to make. These changes will burden PHAs and restrict the flexibilities available to them. These changes come after HUD published requirements PHAs must use to calculate interest on Public Housing Operating Fund grants.

PIH 2025-20

Though the notice is specifically about form SF-425, it adds a number of provisions that could make operating public housing more difficult, including the following:

• PHAs must explain if their cash on hand is greater than the amount they will spend within three days of a form submission;
• An order of expenditures PHAs must use to pay for operating expenses. PHAs must first use program income (except certain non-rental program income) for expenditures and then the operating subsidy;
• PHAs must submit an SF-425 in the Public Housing Portal every year for every individual operating fund grant received;
• PHAs must obligate all grant funding by the end of the grant term or return it to HUD;
• PHAs must liquidate all obligations by April 30 following the end of a grant term; and
• PHAs must retain records and are subject to enforcement actions.

HUD notes that many of these changes are new and that this guidance supersedes previous notices. The notice also says that HUD plans to issue further guidance about other income sources.

PIH 2025-22

This notice includes similar language to past years’ Public Housing Operating Fund calculation notices with several key additions. These new provisions include certifications that the PHA is complying with the ACC, laws, regulations, and executive orders—including new language regarding immigration enforcement. Additionally, like Notice 2025-20, it states that a new expenditure reporting system will be developed and required for use by PHAs operating public housing.

NAHRO will continue advocating for the flexibility and resources agencies need to maintain quality homes for families in public housing. Recently, NAHRO sent a joint letter to HUD with PHADA, CLPHA, and the MTW Collaborative opposing these concerning public housing accounting changes. For more information, see the august edition of The NAHRO Monitor