A financing dispute between the Housing Authority of Winston-Salem and federal housing officials appears to be resolved, with HAWS leaders saying they've been told they won't have to drop anyone from the Section 8 housing voucher program.
HAWS officials had been planning for a worst-case scenario in which they would have dropped as many as 1,800 families, out of the 4,100 that the agency helps with vouchers. The sudden shortfall of $2.8 million came from what HAWS says is a mistake made by the federal Department of Housing and Urban Development.
HAWS officials made plans to cut the financing level of all vouchers by 10 percent starting in September, and the agency said it will still have to go through with that cut.
After sending officials to audit HAWS' books, HUD officials have called to say that they're working to find financing and avoid dropping any vouchers, though HUD hasn't given specifics.
"We're sort of sitting on the edge of our seat just waiting for a number," said Karen Durell, HAWS' chief operations officer.
A spokeswoman from HUD said last week that the agency was working to resolve the problem and that details would be available soon.
HUD officials told HAWS at the end of May that the agency would be getting less money this year and that the cut was retroactive to January -- meaning that for five months HAWS had been spending money it did not have.
HUD required HAWS to fill the gap with money it has in a reserve, but miscalculated how much is in the reserve, according to HAWS officials. The reserve is from years in which HAWS reached its cap on vouchers but still had leftover money. HUD calculated that HAWS had about $6 million, but the agency says it has $3.2 million in the reserve.
HAWS and city officials had started to meet to look for ways to deal with lost vouchers. HAWS will still have meetings with social-services providers because a 10 percent cut in the value of all vouchers is expected to put a strain on those families.
The housing-choice voucher, commonly known as Section 8, is a subsidy meant to fill the gap between the market rate for a house or apartment and what a person with low income can afford.
The program is meant to let people choose their neighborhood, and it allows them to take the voucher with them if they move. Generally, the voucher program requires the holder to pay 30 percent of their income toward housing, after certain deductions.
HAWS recently received special grants for more vouchers specifically for veterans and for people referred to them from the Department of Social Services.
About $178,000 in financing is for 35 vouchers for veterans, who can be referred to the program only by the Veterans Administration.
One hundred vouchers are for two groups: children in foster care who need housing help once they turn 18; and families either in danger of losing their children to foster care, or who are trying to get their children back from foster care. In both cases, the family's housing has to be a key issue in the foster-care decision in order for the family to get the voucher.
HAWS officials said last week that they are glad that HUD appears to be correcting its mistake, which affected other housing authorities across the country.
"It's not fixed until I have something in writing," said Larry Woods, the executive director. "Right now, all I have is a phone conversation."
■ Dan Galindo can be reached at 727-7377 or at dgalindo@wsjournal.com
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