HUD Releases 2025 Voucher Funding Notice
By: Tushar Gurjal, Senior Policy Manager
On May 14, HUD released a notice titled “Implementation of the Federal Fiscal Year (FFY) 2025 Funding Provisions for the Housing Choice Voucher Program” (Notice PIH 2025-13). The notice implements funding provisions for the Housing Choice Voucher (HCV) Program found in the 2025 appropriations bill. This article discusses changes in the notice from the prior year; provides a summary of the funding amounts; discusses the structure of Housing Assistance Payments (HAP); and discusses the structure of administrative payments.
Summary of Changes from the Prior Year
Major changes from the prior year include the following:
HUD has adjusted its HCV program protected reserves to the following (while the percentage amounts remain the same, HUD has removed other protected amounts usually detailed in an offset reallocation explainer appendix):
PHAs with 500 or more vouchers – 4% of HCV program reserves;
PHAs with 250 to 499 vouchers – 6% of HCV program reserves;
PHAs with fewer than 250 vouchers – 12% of HCV program reserves.
The appropriations bill allows HUD to use carryover funds from 2024 funding from the tenant-protection voucher account; administrative fees; HUD-Veterans Affairs Supportive Housing Program (VASH); and Family Unification Program (FUP) for 2025 shortfall categories for both the HAP set-aside and the Mainstream Voucher HAP set-aside.
Shortfall policies have been updated to conform with Notice PIH 2024-21 titled “HCV 2024 HAP Funding – Revised HAP Set-aside shortfall Funding Requirements”;
The HAP set-aside category for project-based vouchers has been updated;
A new category of special administrative fees is available for PHAs that transition Emergency Housing Voucher families to the regular HCV program;
Certain special administrative fee categories are no longer available including the following: small area fair market rent (FMR) community of practice; housing mobility planning funds; voluntary use of small area FMR-based exception payment standards; and funds to supplement prior year Foster Youth to Independence (FYI/FUP) awards.
Funding Summary
The FY 2025 appropriations bill allocated the following amounts to the voucher program (in millions; rounded to the nearest million):
HAP Renewal funding – $31,938 million (i.e., $31.938 billion);
HUD-VASH – $15 million;
Family Unification Program – $30 million;
Tenant Protection Vouchers – $337 million;
HAP Set-aside – $200 million;
Mainstream vouchers – $743 million; and
Administrative Fees – $2,771 million.
Housing Assistance Payments
The Department will calculate a PHA’s HAP renewal allocation for non-Moving to Work (MTW) agencies by establishing a funding baseline based on validated leasing and cost data from calendar year (CY) 2024 without exceeding annual contributions contract (ACC) limits. The Department then adjusts for new vouchers and applies an inflation factor. Finally, if there’s a proration, the Department will apply it. The CY 2025 proration factor for HAP is estimated to be 100%. The Department may conduct offsets (i.e., give smaller payments to PHAs with reserves while giving larger payments to PHAs with smaller or no reserves). The Department plans to conduct an offset that impacts both MTW and non-MTW agencies. HUD will only protect the following amounts of reserves:
PHAs with 500 or more vouchers – 4% of HCV program reserves;
PHAs with 250 to 499 vouchers – 6% of HCV program reserves; and
PHAs with fewer than 250 vouchers – 12% of HCV program reserves.
Funding for initial MTW agencies is determined by their contracts. Funding for MTW Expansion agencies will be consistent with the MTW Operations Notice.
HAP Set-Aside
The 2025 appropriations bill allocates $200 million for a HAP set-aside. The HAP set-aside categories are the following:
Category 1: Preventions of Terminations Due to Insufficient Funding (shortfall) – Deadline to apply – Jan. 30, 2026;
Category 2: Unforeseen Circumstances – Deadline to apply – June 27, 2025;
Category 3: Portability – Deadline to apply – June 27, 2025;
Category 4: Project-based Vouchers – Deadline to apply – June 27, 2025;
Category 5: MTW Expansion PHAs Development Adjustment – Deadline to apply – June 27, 2025;
Category 6: HUD-VASH – Deadline to apply – Sept. 26, 2025;
Category 7: Lower-than-average Leasing – N/A – N/A;
Category 8: Disaster – Deadline to apply – Dec. 19, 2025; and
Category 9: Non-life Threatening Inspection Withheld HAP – Deadline to apply – June 27, 2025.
The notice provides links to apply for each category.
HAP Funding for New Vouchers
The notice discusses funding for new HUD-VASH and FUP/FYI vouchers. There is $15 million for new HUD-VASH vouchers. Of that amount, $5 million will be available for new vouchers, while $10 million will be available for administrative fees and program costs. The $5 million will be added to the $29 million already available from prior years to allow for $34 million available for HUD-VASH vouchers. HUD will issue comprehensive guidance on HUD-VASH vouchers at a later date.
There is $30 million available for new FUP/FYI vouchers. Five million will be used for FUP vouchers allocated through a Notice of Funding Opportunity (NOFO), while the remaining $25 million will be used for FYI vouchers for eligible youth. These funds will be made available under the FYI initiative.
Tenant Protection Vouchers
Tenant protection vouchers (TPVs) are offered to mitigate hardship for families when PHAs take certain actions. The family is not required to accept the TPV. The Department provides replacement TPVs for vacant units that were occupied by an assisted family in the previous 24 months. HUD may change this policy towards vacant units or may offer TPVs for less than 12 months. The 2025 appropriations bill allocates $337 for TPVs. TPVs may be awarded for certain public housing actions and certain multifamily actions. The account includes a $5 million set aside for certain at-risk households in low-vacancy areas. HUD calculates TPV funding based on a PHA’s average per unit cost (PUC). The notice provides instructions for requesting TPVs.
Mainstream Vouchers
The 2025 appropriations bill provides approximately $743 million for HAP renewal and administrative fees for mainstream vouchers. The CY 2025 proration for mainstream vouchers is 93 percent. There is also a $10 million set aside for mainstream vouchers with two categories:
Category 1 – Prevention of Terminations Due to Insufficient Funding (shortfall) – Deadline – Jan. 30, 2026; and
Category 2 – Unforeseen Circumstances – Deadline – June 27, 2025.
The notice provides instructions and links for applying for each category of funds.
HAP Policy Reminders
The notice reiterates certain points about how HAP may be used. PHAs must continue to follow cash management policies (found in Notice PIH 2017-06 titled “Cash Management Requirements for the Housing Choice Voucher Program”). Housing agencies may request additional disbursements when monthly disbursements and Restricted Net Position (RNP) do not cover monthly expenses. For non-MTW agencies, HUD is using Form 50058 (family report) leasing data to determine monthly disbursements.
Funds in RNP or HUD-held program reserves may only be used for eligible HAP needs in the current calendar year. Neither HAP, RNP, or HUD-held reserves may be used for ineligible purposes such as administrative expenses, nor may they be loaned, advanced, or transferred to other voucher accounts or other program accounts (except for MTW agencies).
Finally, PHAs may not lease over their ACC limits, even if they have sufficient budget authority. If a PHA is overleasing, it must find other eligible funding sources to pay for the overleasing and must take steps to stop overleasing. Funding eligibility will not take into account overleasing.
Housing agencies must continue to submit required financial documentation in both the Voucher Management System (VMS) and the annual Financial Assessment Subsystem. Non-MTW PHAs will be transitioning to eVMS and must make sure that their IMS/PIC submittals are accurate.
The Department is implementing new grants management and reporting tools. Housing agencies will be required to report on grant performance and financial activities. Examples may include vendor and cash disbursement “supporting details for [PHAs] and [PHA] sub-recipients.” The Department reserves the right to exercise all available rights and remedies for noncompliance with these grant management and financial reporting requirements, including requiring 100 percent review or stopping future disbursements if reporting is not timely submitted.
Administrative Fee Funding
The 2025 appropriations act allocates $2.771 billion for administrative fees, including $30 million for additional administrative fees. Administrative fees may also be used for certain “other expenses” detailed in Notice PIH 2022-18 titled “Use of Housing Choice Voucher (HCV) and Mainstream Voucher Administrative Fees for Other Expenses to Assist Families to Lease Units.” Administrative fees continue to be allocated according to a fee amount based on the number of leased vouchers.
The notices discusses how to apply for blended administrative fees and higher administrative fees. Blended administrative fees can be requested for PHAs with vouchers that are leased in multiple areas. The deadline to apply for them is July 11, 2025. Higher administrative fees can be applied for when a PHA serves two or more counties. The deadline to apply for them is July 11, 2025.
Special Fees
There are $30 million in special fees and nine categories for disbursement of these fees:
Category A – HCV Homeownership Closing Fees – HUD calculates bi-annually;
Category B – New HCV Homeownership Program – HUD sends certifications bi-annually;
Category C – PHAs that Administer TPVs in Connection with Multifamily Housing Conversion Actions – Processed as requests for TPVs are received by HUD;
Category D – Portability – Calculated by HUD;
Category E – Audit Costs for Declaring Major HCV Programs per Notice PIH 2021-08 and for HCV Voluntary Transfers per Notice PIH 2018-12 – HUD processes as requests are received;
Category F – New FUP/FYI Vouchers Awarded in 2025 – HUD determined based on FUP/FYI awards;
Category G – Disaster Vouchers – HUD will issue additional guidance in the event of a disaster voucher allocation;
Category H – Transition of EHV to HCV – Deadline – Feb. 28, 2026; and
Category I – Secretary’s Discretion – Oct. 31, 2025.
The notice provides additional information on the process of the allocation and links to applications when necessary.
Administrative Fee Policy Reminders
Housing agencies must follow current guidance on cash management procedures and use of reserves. Housing agencies must continue to submit to VMS and the annual Financial Assessment Subsystem. As mentioned earlier, HUD is implementing new grants management and reporting tools.
The notice contains multiple appendices that provide additional information related to various sections of the notice.
The full notice can be read here.