HUD Publishes FY 2026 HCV Funding Notice

By: Tushar Gurjal, Senior Policy Manager

May 6, 2026 – Earlier today, HUD published a notice titled “Implementation of the Federal Fiscal Year (FFY) 2026 Funding Provisions for the Housing Choice Voucher Program” (PIH Notice 2026-12). The notice implements the Housing Choice Voucher (HCV) funding provisions of the Fiscal Year (FY) 2026 appropriations bill.

The notice notes the funding for each HCV account. It is the following (in millions; rounded to the nearest million):

• Housing Assistance Payment (HAP) Renewal Funding – $34,557 million;
• HUD-Veterans Affairs Supportive Housing (VASH) Program – $15 million;
• Family Unification Program (FUP; includes Foster Youth to Independence [FYI]) – $30 million;
• Tenant Protection Vouchers (TPVs) – $601 million;
• HAP Set-aside – $400 million; and
• Administrative fees – $2,836 million.

Changes from prior years

The notice makes certain changes from prior years. The HAP renewal funding now includes the Mainstream voucher account (housing agencies must still continue to report Mainstream leasing data separately like any other special purpose voucher). There is also a new Mainstream set-aside category for Mainstream vouchers. The Department will consider PHAs’ shortfall risk in determining the reserve offset applied to their renewal funding eligibility. Moving to Work (MTW) agencies will be subject to an offset of their excess program reserves associated with their “single-fund budget authority.” The conditions for HAP set-aside eligibility have changed substantially. Housing agencies may exceed their annual contributions contract (ACC) caps for emergency housing vouchers (EHVs) which have been transitioned to the HCV program (only for the 2026 renewal calculation).

The notice makes changes to the implementation of administrative fee funding from prior years. Mainstream administrative fee funding has been moved from the Mainstream account to the administrative fee account, though separate reporting will remain. There is a new administrative fee special fee for PHAs that reduce their payment standards back into the basic range.

Housing Assistance Payments

Renewal Calculation – to calculate renewal eligibility, HUD creates a HAP funding baseline from validated leasing and cost data for calendar year 2025 that does not exceed a PHA’s ACC unit limits for 2025. The baseline includes Mainstream HAP cost data. It then adjusts the baseline with new vouchers (e.g., HUD-VASH, FUP, FYI, etc.) and then applies a renewal funding inflation factor (RFIF). Next it applies a proration factor, though this year there is anticipated to be full funding. Finally, the Department applies an offset based on excess HAP program reserves, but the offset will not result in the PHA being put in a shortfall position. Offset calculations differ for non-MTW agencies, original MTW agencies, and expansion MTW agencies. Detailed offset calculations can be found in the PHA’s renewal allocation enclosure.

Original MTW agencies will have limits on the amount offset as well as an appeal process which will be detailed in a future notice.

HAP Set-aside – The FY 2026 appropriations bill provides $400 million for a HAP set-aside. Although there are 10 categories for set-aside assistance, since HUD is anticipating a large shortfall in 2026, some or all categories other than shortfall may not be funded. Housing agencies may apply for each category. The notice provides instructions and links to apply for each category. The categories and deadlines for each category are detailed below:

1. Category 1 – Prevention of Terminations Due to Insufficient Funding (shortfall) – Friday, January 9, 2027;
2. Category 2 – Unforeseen Circumstances – Friday, June 26, 2026;
3. Category 3 – Portability – Friday, June 26, 2026;
4. Category 4 – Project-based vouchers – Friday, June 26, 2026;
5. Category 5 – MTW Expansions PHAs Development Adjustment – Friday, June 26, 2026;
6. Category 6 – HUD-VASH – Friday, September 25, 2026;
7. Category 7 – Lower-than-average Leasing – N/A;
8. Category 8 – Disaster – Friday, December 18, 2026;
9. Category 9 – Non-Life-Threatening Inspection Withheld HAP – Friday, June 26, 2026; and
10. Category 10 – Mainstream Vouchers Increased Costs – Friday, June 26, 2206.

Requests must be submitted through DocuSign and appropriate links are provided in the notice along with additional instructions.

In determining whether HUD will provide shortfall funding to a housing agency, the Department may consider the following (reproduced from the notice; semi-colons and the word “and” added):

1. Availability of funds and estimated shortfall need;
2. Number of times PHA has been in shortfall;
3. Percentage shortfall need is of annual budget authority (for example, reducing an award for any shortfall amounts over certain percent of ABA);
4. Complete applications received prior to September 15, 2026;
5. PHA adoption of cost-increasing policies after enactment of the 2026 Act, February 3, 2026; and
6. Failure to comply with any shortfall requirements, including requirements pertaining to unallowable new admissions.

The Department may also assess the availability of non-HAP sources of funds that a PHA could use to pay for a portion of its shortfall need. Questions may be sent to shortfallinquiries@hud.gov.

HAP funding for new vouchers – The notice allocates $15 million for HUD-VASH ($5 million for new HUD-VASH vouchers and up to $10 million for administrative fees and other HUD-VASH program costs). The notice also allocates $30 million for FUP/FYI vouchers. Of that, $5 million will be for FUP through a new Notice of Funding Opportunity (NOFO). The remaining will be for the Melania Trump Foster Youth to Independence (FYI) initiative. These funds will be available on a non-competitive basis under PIH Notice 2023-04 or a subsequent notice.

Tenant Protection Vouchers – The notice notes that there is $601 million in Tenant Protection Voucher (TPV) funding. TPVs will only be provided in 2026 for vacant units that were occupied by an assisted family in the previous 12 months. There is a $5 million TPV set-aside for certain at-risk households in low-vacancy areas. The Department will calculate TPV funding based on average per unit cost in the housing agency’s HCV program. In certain instances, the PHA can request a cost increase. Questions on the TPV cost adjustment process can be sent to PIH_Conversion_Actions@hud.gov.

Funding from the TPV account is available for EHV shortfall prevention. HUD will provide additional guidance on accessing the EHV shortfall funds in a future notice. Additionally recaptured EHV service fees are available to be repurposed as HAP funding to address EHV shortfalls. HUD encourages PHAs that will be facing an EHV shortfall to reach out to their financial management center (FMC) financial analyst (FA) and to carbon copy (CC) EHV@hud.gov. The Department anticipates adequate funding to address all EHV shortfalls.

Mainstream Vouchers – housing agencies may use their calendar year (CY) 2026 HCV program renewal funding to make HAP for Mainstream vouchers, though PHAs must use existing Mainstream program reserves for Mainstream purposes. Agencies must also track Mainstream program reserves separately from other voucher reserves. The Department encourages agencies to prioritize the use of Mainstream voucher reserves for Mainstream expenses so that housing agencies do not have to track Mainstream program reserves separately from voucher reserves for a long period of time. The notice notes that reporting requirements remain the same for the Mainstream program and cites certain sources for additional information on reporting requirements.

HAP Policy Reminders – Housing agencies must follow the HCV cash management requirements in PIH Notice 2017-06. Non-MTW agencies should ensure that their 50058 data is accurate as HUD uses the Enterprise Voucher Management System (eVMS) to determine HAP monthly disbursements. Housing agencies may only use HAP reserves for eligible HAP needs. With the exception of EHV households transferring to the regular HCV program, housing agencies may not lease beyond their ACC caps. In using outside funds, housing agencies should review PIH Notice 2013-28 and expansion MTW agencies should review the MTW Operations notice. The notice provides some reporting reminders. Finally, the notice notes that additional reporting requirements for new FY 2026 Jobs Plus awards and foregoing increases to tenant rent payments will be provided separately.

Administrative Fee Funding

There is allocated $2,836 million for administrative fees. Of that, $30 million will be made available for special administrative fees. In general, administrative fees are calculated based on a formula in place before the enactment of the Quality Housing and Work Responsibility Act of 1998 (QHWRA). The calculation is based on the number of vouchers leased on the first day of each month. The CY 2026 administrative fee rate can be found here. The Department disburses administrative fees every month and reconciles them every 3 months.

Some housing agencies that serve multiple administrative fee areas may request a blended administrative fee rate based on the location of their assisted units. The date to apply for a blended rate is Friday, July 10, 2026. See the notice for specifics on the application process.  Similarly, some PHAs that operate over a large area (two or more counties) may request higher administrative fees. The date to apply for a higher rate administrative fee is Friday, July 10, 2026. See the notice for specifics on the application process.

Special Fees – The following are categories of special administrative fees along with their deadlines if applicable:

1. Category A – HCV Homeownership Closing Fees – HUD determines based on 50058 data – HUD calculates bi-annually (link sent to eligible PHAs);
2. Category B – New HCV Homeownership Program – HUD determines based on PHA certification – HUD send certifications bi-annually – (link sent to eligible PHAs);
3. Category C – PHAs that administer TPVs in connection with multifamily housing conversion actions – HUD determines based on TPV applications – HUD processes requests as received;
4. Category D – Portability – HUD determines bases on 50058 and VMS data – HUD calculates;
5. Category E – Audit costs for declaring major HCV programs per PIH Notice 2021-08 and for HCV Voluntary Transfers per PIH Notice 2018-12 – HUD determines after PHA request – HUD processes as requests are received;
6. Category F – New FUP / FYI vouchers awarded in 2025;
7. Category G – Disaster vouchers – In the event of a disaster voucher allocation, HUD will issue additional guidance;
8. Category H – Transition of EHV to HCV or PBV – HUD determined – Transactions must be submitted to IMS/PIC no later than Friday, February 26, 2027;
9. Category I – PHA Exception Payment Standard Elimination – PHA Application – Friday, October 30, 2026; and
10. Category J – Secretary’s Discretion – PHA Application – Friday, October 30, 2026.

Those categories that require an application will be submitted through DocuSign. Links and additional instructions can be found in the notice.

Executive Orders

The notice notes that all recipients of federal financial assistance must comply “. . . with applicable existing and future executive orders (EOs) and other presidential actions, whether the recipients carry out those activities directly or use contractors or subrecipients.” The notice lists several EOs and provides links to them.

Appendices

The notice includes several appendices. Appendix A provides the statutory language from the 2026 appropriations bill. Appendix B provides additional detail on eligibility for shortfall funding. Appendices C through J are applications for various funding categories described above.

The full notice can be found here.