At around 1:30 p.m. Tuesday, the executive director of Bangor’s housing authority discovered he was unable to withdraw any of his operating funds.
The lock-out happened shortly after the newly inaugurated President Donald Trump announced a freeze on all federal grants and loans, a move that Senator Susan Collins, R-Maine, decried as “far too sweeping” and one expected to impact trillions in government spending.
The memo announcing the freeze from Trump’s acting director of the Office of Management and Budget said it would be effective at 5 p.m. Tuesday, but the executive directors of both Portland and Bangor’s housing authorities said they were already unable to access federal funds by early Tuesday afternoon. The director of MaineHousing, the state housing authority, said that all public housing authorities in Maine were facing the same issue.
“We’re locked out. I can’t draw down any of our grants. I can’t draw down anything,” Mike Myatt of BangorHousing said. “And I just reached out to my colleagues, and most of them are responding like, ‘We’re frozen, too.’”
Brian Frost, the executive director of the Portland agency, said he’d run into the same problem but in the absence of any guidance from the U.S. Department of Housing and Urban Development was unsure whether the system had been shut down early or was just overwhelmed.
“In the short term, it shouldn’t have any immediate impact, we have financial stability within our reserve funding,” Frost said of his agency’s ability to operate. “But certainly, smaller housing authorities could really be adversely affected.”
Though the operations of both Bangor and Portland’s housing authorities — from construction activity on public housing projects to paying down tenant rent and utility bills — are at a standstill, a memo Myatt received from the Office of Management and Budget promised the freeze would not affect rental assistance.
Despite that assurance, funds for Section 8 rental assistance have not yet flowed to Maine’s public housing authorities, said Dan Brennan, director of MaineHousing. That’s a grave concern, particularly because it’s almost the end of the month in the middle of winter.
“People can’t pay their rent and landlords [can’t] get their rental income, that’s an immediate impact,” Brennan said. “People rely on it, we got no notice that this was going to happen.”
MaineHousing only received a notice from the federal Office of Management and Budget Monday night about the freeze, but has yet to receive clarification on which programs are being affected. So far, the agency has been unable to draw money down to make payments for weatherization jobs and has only been able to secure heating assistance for the upcoming week. MaineHousing is unsure if it still has access to capital dollars for multi-family housing projects that are close to beginning construction.
“We may have to [hold] on a couple of deals that are very close to going into construction loan closing,” Brennan said. “It’s very fluid. It looks like things are evolving, but we’ll see what happens.”