The Landlord Lens - Goverment Shutdown 2025: Will Section 8 Survive?

Episode Date: October 17, 2025

With the looming 2025 government shutdown threatening millions of Americans, one question stands out: what happens to Section 8? In this episode of Landlord Lens, we break down exactly how a shutdown could disrupt housing assistance, voucher payments, and landlord reimbursements across the country. We’ll look at the chain reaction that happens when HUD funding freezes, the potential delays landlords should prepare for, and what this means for the renters who rely on these programs to stay housed.We’ll also unpack the political standoff behind the scenes, why Congress can’t agree, what agencies get hit first, and how long the damage could last if negotiations drag on. Whether you’re a property owner, renter, or just following the economic fallout, this episode cuts through the noise to show how the shutdown might ripple through the housing market and whether Section 8 can survive it.

Like most of our shutdowns is an austerity versus spending problem. Do you read this as a increased frequency of risky events for Section 8 landlord? If the government shutdown does not end, as of November 16th, rent payment checks may stop coming. Hey, everybody. Welcome to another episode of The Landlord Lens. I am joined by my co-host, Seamus Nally. Seamus, how are you this fine Wednesday? Doing awesome, John. And I'm super excited to talk about the largest headline we've had for the last 15 days, which is the government shut down. What are some of your favorite headlines that have come out of it so far?

Well, the ones that have jumped out to me have to do with food aid program, laying off federal workers, closing of our national parks, and of course, are we ever going to see the Epstein files? But I will tell you the aspect of the shutdown that's been most interesting to me is what the impact on Section 8 could be, since that is a government. run program. And HUD, which administers that the housing vouchers or Section 8 is frozen at the moment. So let's jump into that subject and what this all means. Well, hop right into HUD after we talk about what is causing the shutdown. It's like most of our shutdowns is an austerity versus

spending problem. It does look like there is meaningful middle ground, despite what both sides are fighting about in their headlines and the talking heads. So not super worried about this being a protracted experience, but the Section 8 vouchers and the inspections and that department's functioning have delayed, I understand. Yeah, and certainly some people that are watching right now may work for the government, right, and their lives have been impacted. It has been interesting to see that a budget did pass the House. We've failed in the Senate twice, so hopefully we get something that passes the Senate. It'll then have to flip back to the House, I believe, to pass before it hits the commander-in-chief's desk.

So I wonder if you could give a quick, you know, three-sentence explanation of how a Section 8 process works and what role HUD plays in that tendency. Section 8 or Housing Vouchers is a federal program from the HUD Housing and Urban Development. And what it does is it helps subsidize renters, low-income renters, with additional rent, right? In some cases, paying all of the rent for that individual. But in a lot of cases, it's complementing the income that they already make and paying a large portion of it. HUD has a responsibility to ensure that the housing that these individuals are living in is up to a certain standard. And so they have an inspection and a renewal process, which is part of what has

actually been completely stopped with the government shutdown. Gotcha. So HUD inspects properties, does renewals on those properties involving inspections and then also issues vouchers to the landlord or to partially subsidize rent for low-income people. Exactly. It pays rent on behalf of the HUD participants. Gotcha. And just to also be super clear, the inspections and the renewal process involve people, actual government employees, while the disbursements of the funds to the landlord are automated.

Exactly. And I think what you're getting at from that perspective is what is actually shut down right now. What is actually frozen? So for the last 15 days, the people, People-oriented processes within HUD have not been occurring. So you're talking about primarily inspections and contract renewals, as well as issuance of new vouchers, right? So people wait on these incredibly long wait lists to get into the housing voucher, the

Section 8 program. Renters, right? Renters, yes. Those are not being processed right now with a shutdown. The good news, though, for our landlords out there is that rent payments are still flowing, It's not just good news for our landlords, but it's also really good news for our tenants, right? They want to make sure they can afford rent. And so HUD has a reserve, which they are working through right now or spending through is probably the right way to put it. And estimates are that that reserve will last till the middle of November. So about November 15th, if the government shutdown does not end as of November 16th, right, rent payment checks may stop coming from HUD. From HUD, exactly. Right. That is the estimates of the amount of reserves that they have today. Now, if we go back in time,

because government shutdowns aren't new, right? Our longest government shot down in recent history was December 2018 into January 2019. It was 35 days, right? So we're at day 15 right now. It's an additional 20 days. During that time, the HUD's reserve lasted the entire time. Oh, so this has never happened before. So it actually covered the entire time. Yeah, it's never happened before and it hasn't happened yet. Yeah. Right. We're still, you know, three weeks away from, from that happening. So we actually don't have history where we can go back and look at, okay, what happened when the money dried up, dried up, right? The reserves dried up. But when we look back at that 2018 to 2019 shutdown, what we do see is that about a thousand contract renewals

were up that were not renewed, meaning somebody has been in the voucher program, that contract comes up for renewal and they're not automatically renewed. There's something that has to happen on behalf of HUD team members to make that happens. Outside of that, though, the impact from the last shutdown on voucher programs outside of just the personal stress that it causes was pretty minimal. Gotcha. Okay. So at least historically, there's not a lot of reason for concern based on how the previous governments have come back online. Exactly. And I think even from the perspective right now, us being 15 days in, you're talking about one time ever before that we got to that 35 day mark. Knowing that we have 30 days left of reserves,

that's actually great, right? Because that means we could have a shutdown of 45 total days before the rent check stop flowing. And so that makes me feel optimistic that this is something that'll be all wrapped up by then. Awesome. Okay. So in that case, probably, you know, if you're a Section 8 landlord watching, it's very unlikely that your renewal date with your tenant is October 31st, November 1st. It's pretty unlikely. But what if that is your case? What do you do? Yeah. So I think you have a challenging decision to make. I think in most cases, there's no reason to believe that the renewal won't take place once HUD comes back online. Right. So you could really treat your tenant as month to month would be my suggestion. Call your local HUD, you might not be able to reach someone because very few people are working, but it is still worth calling, asking if that's the scenario that you're actually in, asking what the best steps are to take. Once again, it's unprecedented, though, that we're in a position that the government obviously stayed shut down forever, right? So in most cases, I think you could expect maybe

a couple week delay on that renewal coming in and you being in a stable position moving forward with your Section 8 tenants. Okay. The other situation I think is worth addressing here that would feel urgent, right, in this moment would be if you're trying to get a renewal inspection done to go bring your rental back to market and you're unable to get a hold of anybody. What should you do in that case? Is that just give up on the Section 8 program and go to market without the renewed inspection?

Is that weight, right, incur more vacancy costs? Yeah, I think in the multiple choice you just gave me, you hit the first. two options that I'm aware of. One is you open it up to the broader market and syndicate it out and see what applicants are out there. The other is a hurry up and wait. You know, you could send a sternly worded email to your senator. I hear that works. If only. Letters to Santa have more success, I think. But that is an approach you can take outside of that, you're just going to have to stay put. one suggestion I would have is contact your lender. So let's say, let's say you really rely on this rental income to pay a mortgage on the properties. Contact to your lender, explain the situation.

This is Section 8 housing. The government's shut down. They understand that, right? And ask for an extended grace period. There are certainly times in the past where lenders have made those exceptions, especially if you have a really strong history with them, to not ding you with late fees or reporting it to the Credit Bureau. This austerity versus spending conversation that we have in this country all of the time isn't going away. Polarization is going up at the national and the federal level, right? Do you read this as a increased frequency of risky events for Section 8 landlords? Should Section 8 landlords just get out of it? I don't think so because I think housing affordability is something that both parties, that's bipartisan, right? Yeah, yeah, yeah. And so that one,

fix that. I think looking after the citizens in the United States is something that both parties agree on. And so while there's been some doge efforts earlier in the year to cut some of HUD funding, that was really around making it run more efficiently, as opposed to actually cutting the funding that was going directly to housing voucher participants. Right. Right. Tenants out there. So I don't think this is a reason to lean back. I think it's a reality of relying on the government for anything, right? Things, things. will change that are outside your control. But in my opinion, it's not a reason to run away from Section 8.

There's a lot of benefits in this stable rent checks that Section 8 produce. And it's an incredible resource for a lot of tenants out there. Awesome. Okay. So I appreciate it. Thank you for providing a message of calmness. Yeah. And what can feel like a very hectic national environment.

Yeah. And hopefully for all the landlords out there, this is now a reason to actually look at some of the headlines in care, because if you're similar to me, it's been kind of challenging to get all hyped up up until this point. But please comment with maybe struggles that you're seeing, or maybe you were a Section 8 landlord in 2018 into 2019 during the last shutdown and could provide some historical perspective in the comments. We'd love to read it. Yeah, that would be awesome. And if you're a tenant too, we had a lot of trouble finding what your experiences right now out there is your HUD representative responding how what's your experience been like please leave a

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