Why It Matters
The U.S. Department of Housing and Urban Development (HUD) cut its workforce by 29 percent in 2025, terminated about 21 percent of its active contracts valued at roughly $367 million, and left nearly all of the 20 stakeholder organizations interviewed by auditors reporting confusion, delays, and operational disruptions, according to a new GAO audit published Sept. 30, 2026. Over half of the employees who left had at least 10 years of service at HUD, including 41 percent with more than 20 years.
The Big Picture
HUD administers programs related to housing assistance, community development, and fair housing, and its headquarters and field staff work with public housing agencies, private property owners, and nonprofit organizations. Executive orders and other actions issued in 2025 called for workforce and program changes at HUD, and HUD largely achieved its workforce reductions through deferred resignation programs.
HUD did not publish notice of any reorganization plans that led to field office closures in 2025, though in 2026 it announced plans to consolidate one field office into a nearby regional office. About half of HUD's 68 active grant programs made new awards in fiscal year 2025, with the median value of those awards higher than in previous years, while most of the roughly 21 percent of active contracts HUD terminated in 2025 involved professional or IT services.
The U.S. Government Accountability Office (GAO) was asked by congressional requesters to examine the effects of these changes. GAO selected three HUD functions for review: enforcement of the Fair Housing Act and the Violence Against Women Act of 1994, administration of the Section 8 Project-Based Rental Assistance (PBRA) program, and coordination of inspections of HUD-assisted properties.
Interviews with 20 stakeholder organizations, including fair housing grantees, public housing agencies, and Section 8 project-based rental assistance property managers, found that fair housing stakeholders reduced services or staffing during monthslong funding gaps, and that stakeholders reported delays in physical inspections of HUD-assisted properties following HUD's 2025 changes. Nearly all of the organizations interviewed said that experienced HUD points of contact had left, making it harder to navigate agency programs.
Stakeholders also reported delays in physical inspections of HUD-assisted properties. The loss of experienced staff compounds the problem.
HUD reported launching efficiency initiatives since January 2025, including a unified grants system to standardize grant administration and a project voucher initiative to automate aspects of rental assistance processing, but it provided no supporting documentation to GAO and did not respond to GAO's requests to discuss them. As a result, Congress and the public have limited information on the status or effectiveness of those initiatives. That gap is notable given the scale of the disruption the audit documents: HUD simultaneously reduced the staff responsible for administering programs and did not respond to GAO's requests for documentation about whether its replacement systems are operational.
The Bottom Line
Fair housing stakeholders reported cutting services or staffing during months-long funding gaps, and other stakeholders reported delays in physical inspections of HUD-assisted properties following HUD's 2025 changes.
Fair housing enforcement and Section 8 PBRA administration are statutory obligations, not discretionary activities, meaning the service gaps the audit documents are not simply operational inconveniences but potential failures to carry out congressionally mandated programs.
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