A potential federal funding freeze is threatening billions of dollars for housing and disaster recovery programs in North Carolina. After days of memos, lawsuits, judicial interventions, recissions, and press statements, the status of the funding freeze remains unclear. Housing organizations, programs, and services remain in limbo, leaving families and communities across the state at risk of losing critical housing support. The North Carolina Housing Coalition has been closely tracking the developments of this funding freeze and has organized a summary of housing impacts as well as a timeline of events below, which we will continue to update as this situation develops. We have also included and will continue to update calls to action as we fight to preserve federal housing investments for North Carolina families and communities.
Monday
On Monday evening, January 27, the Office of Management and Budget (OMB) released a memo (M-25-13) that called for the “Temporary Pause of Federal Agency Grant, Loan, and Other Financial Assistance Programs.” The memo states that “to the extent permissible under applicable law, Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities…” The memo was initially scheduled to go into effect Tuesday, January 28 at 5:00pm. The memo also orders federal agencies to “submit to OMB detailed information on any programs, projects or activities subject to this pause” no later than February 10.
As stated in the memo, the purpose of the funding freeze is to “align Federal spending and action with the will of the American people as expressed through Presidential priorities.” The alleged “use of Federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies” is cited as justification for the temporary pause of both the issuance of new funding awards and the “disbursement of Federal funds under all open awards.”
According to OMB’s list of federal programs within the scope of this order, most federal housing funds would be paused indefinitely, including the national Housing Trust Fund, HOME Investment Partnerships Program, Community Development Block Grants, Public Housing Operating and Capital Funds, Section 8 Housing Choice Vouchers, Project-Based Rental Assistance, Eviction Prevention Grants, Homeless Assistance Grants, Disaster Recovery, Weatherization, USDA Rural Development, Fair Housing, Housing Counseling, and more.
It is important to emphasize that the freeze would apply to funds that Congress already appropriated by law. Because many federal funds operate through reimbursement, the order would freeze the distribution of money owed to organizations and programs who have already provided critical services and support to communities across the country. Even a short disruption in funding could have had catastrophic impacts on these programs’ abilities to continue providing services and on organizations’ abilities to make payroll for program staff.
Tuesday
The NC Housing Coalition spent Tuesday on the phone with North Carolina’s congressional delegation pushing back against what would have been a devastating freeze on resources to families and communities across the state, and we issued an action alert calling on our network to join the public pressure campaign against the order. North Carolina advocates were among thousands across the country who contacted Washington specifically to highlight the impacts of this order on housing and community development. Thank you for responding to our action alert and joining us in contacting our representatives.
Around midday Tuesday, federal payment portals began to shut down hours before the 5pm deadline was supposed to go into effect.
In the afternoon, the White House released a Q&A-style fact sheet related to the memo that stated “[a]ny program not implicated by the President’s Executive Orders is not subject to the pause,” and specifically that “funds for rental assistance” would not be paused. This fact sheet contradicted OMB’s list of agencies and programs subject to the order, which included Section 8 Housing Choice Vouchers and other rental assistance programs.
Just before the funding freeze went into effect at 5pm, U.S. District Judge Loren L. AliKhan blocked the order through Monday, February 3. North Carolina was among more than 20 states and several national organizations to also file lawsuits challenging the freeze on Tuesday.
Beginning Tuesday afternoon and into the evening, some members of Congress and the Trump administration blamed the media for causing widespread confusion and panic about the funding freeze.
Wednesday
By Wednesday morning, some housing funding had resumed following Tuesday’s public pressure campaign, including Section 8 Housing Choice Vouchers, Project-Based Rental Assistance, Section 202 Housing for the Elderly, and Section 811 Housing for Persons with Disabilities.
On Wednesday, January 29, OMB rescinded the funding freeze memo. However, White House Press Secretary Karoline Leavitt quickly announced that the rescinded memo was “NOT a rescission of the federal funding freeze” and that “The President’s EO’s on federal funding remain in full force and effect, and will be rigorously implemented.” Both Secretary Leavitt and President Trump continued to place blame on “dishonest media coverage” for creating panic and confusion around the orders.
As of 5pm Wednesday, the status of the federal funding freeze remains unclear. It appears that the rescission was an attempt to circumvent Judge AliKhan’s blocking of the order rather than a promise that funding will continue to flow. While some federal funding portals were restored, it is unclear if any payments will be distributed.
Thursday
As of Thursday morning, federal payment portals were back online but still experiencing technical issues, impacting the disbursement of funds for some housing programs.
Fight for Housing
Regardless of whether the current funding freeze is successful, the Trump administration has clearly signaled that federal housing funds, programs, and policies are targets for drastic spending cuts and fundamental policy changes over the next four years. As housing costs continue to rise, these changes – enacted through Executive Orders, Congressional budget cuts, or other means – could gut North Carolina’s housing ecosystem and have devastating impacts for families and communities across the state.
Ask yourself: Is the work that you do worth fighting for? Are the communities you serve worth fighting for? If the answer is yes, then it’s time to get loud and stay loud. North Carolina’s Congressional delegation needs to hear about the transformative impact of federal housing dollars in their districts, and they need to understand the catastrophic effects that the loss of these funds will cause across the state. They need to hear this message from every level of your organization: your directors, your board, your staff, your organizational partners, your donors, your clients, and everyone else in your network.
Keep Calling Your Representatives
Until the White House and OMB commits to distributing all of the funds that have been lawfully appropriated by Congress, we urge you to continue contacting Sen. Tillis, Sen. Burr, and the members of Congress who represent your district and the districts your organization serves. You can continue to share our updated Action Alert with your networks.
Share Your Housing Impacts
Tell us how the potential loss of federal funding will impact housing in your community, and let us know if you would like the NC Housing Coalition’s support in contacting your elected officials by contacting policy@nchousing.org.
Register for NC Housing Day 2025
While we continue to communicate with our Congressional delegation about federal housing resources, our state legislators need to make housing a top priority as they develop the state’s two-year budget and legislative priorities for the rest of the year.
Register now for NC Housing Day 2025 on April 9, where you’ll have the opportunity to meet with your state legislators to advocate for housing in your community. You’ll also connect with other housing advocates across the state and learn more about how you can engage with housing advocacy year-round. You can learn more about NC Housing Day here.
Stay Connected for Updates
As this story develops, we will continue to update this blog with more information. Join our weekly Housing Call Tuesdays at 9:45am for live updates, or listen to the recordings through our Housing Matters 2 NC podcast. Sign up to our listserv for future alerts and for our bi-monthly Housing Matters newsletter, where we aggregate and provide deeper analysis of the latest federal, state, and local housing news.
Message from Executive Director Samuel Gunter
