The Department of Housing and Urban Development shed about 29% of its workforce in 2025, falling from roughly 8,800 employees to about 6,300, and the housing groups that depend on the agency say the result has been lost contacts, slower answers, delayed inspections and monthslong funding gaps, according to a Government Accountability Office report publicly released Oct. 14, 2026.
The 39-page report, requested by Democratic lawmakers including Sen. Elizabeth Warren, ranking member of the Senate Banking Committee, and Rep. Maxine Waters, ranking member of the House Financial Services Committee, examines how the 2025 executive orders on the federal workforce and spending played out at HUD. It also notes that HUD did not respond to GAO’s requests for information “throughout the audit.”
Who left, and how
According to Office of Personnel Management data GAO analyzed, 3,188 employees separated from HUD in 2025. About 72% of them, or 2,296 people, left through a voluntary deferred resignation program, either the government-wide offer or a HUD-specific one that ran from March 31 to April 11, 2025. HUD hired 193 people during the year.
The departures skewed heavily toward veterans. More than half of those who left had at least 10 years at HUD, including 41% with more than 20 years of service. The largest numbers left from duty stations in the District of Columbia (792), California (158) and Texas (126), but some states lost far larger shares of their HUD staff: 79% in Utah, 62% in Arkansas and 57% in Virginia, compared with December 2024 levels.
HUD’s fiscal 2027 budget justification says the department expects to largely maintain the 2025 reductions while “strategically backfilling critical positions,” GAO reported. HUD did not publish notice of any field office reorganization in 2025, though on June 24, 2026, it announced plans to fold its Kansas City, Mo., field office into the Kansas City, Kan., regional office.
Grants and contracts
Of the 68 HUD programs that made new grant awards at some point from fiscal 2016 through fiscal 2024, only 32 made new awards in fiscal 2025, GAO found. Twenty-one of those 32 made fewer awards than their historical median, although 24 had higher median award values. GAO cautions that programs without new awards may still have been paying out earlier multiyear grants.
HUD also terminated 144 of its 675 active contracts in 2025, about 21%, with a total value of about $367 million, of which about $291 million had been obligated. About 81% of the terminated contracts were for professional or IT services.
What housing providers told GAO
GAO interviewed representatives of 20 organizations, including fair housing groups, public housing agencies and managers of properties in the Section 8 Project-Based Rental Assistance program, which supports about 1.3 million affordable units. The auditors stress the sample is not generalizable, but the accounts were consistent.
Nearly all said experienced HUD contacts left in early 2025 “without warning or a handoff.” One fair housing group said questions that once drew same-day answers could take up to 30 days. A Section 8 property manager said approval to refinance a rehabilitation project begun in 2024 was still pending well into 2026. One public housing agency said inspection contractors who normally scheduled visits early in the year did not reach out until November, then booked hundreds of unit inspections in the two weeks between Thanksgiving and Christmas. Another housing agency could not access HUD’s disbursement system for three months after hiring a new executive director, and had to use reserves to cover salaries and utilities.
The sharpest effects were in fair housing enforcement. HUD’s February 2025 termination of 78 Fair Housing Initiatives Program grants, later reversed after a lawsuit, and its failure to release second- and third-year funding for multiyear awards produced what GAO describes as a 10-month funding gap. One grantee told GAO it opened 25 discrimination cases during that gap, compared with 82 in the preceding 10 months; another stopped all fair housing testing. Fair housing funding remains contested; RealtyWire has reported on fair housing groups suing HUD over its funding overhaul. HUD said in a June 12, 2026, press release that it had cut its fair housing case backlog by 27%, but GAO said it could not verify the figure because HUD did not provide information on its process changes.
HUD’s efficiency push, unverified
HUD has described several initiatives meant to do more with fewer people, including a Unified Grants System that would use artificial intelligence to flag possible fraud in grantee spending, a “Project Voucher” effort to automate rental assistance calculations, and a customer-service consolidation called EfficienCX. GAO said the efforts “may help HUD modernize,” but that HUD officials did not respond to requests to discuss them, leaving “Congress and the public” with limited information on their status. The report makes no formal recommendations; HUD reviewed a draft and provided only technical comments.
On the evidence in the report, agents, lenders and developers should expect that HUD-dependent transactions, from Section 8 refinancings to inspections of assisted properties, may run on longer timelines than before 2025. That matters as the agency takes on new work, including the FHA’s expansion of multifamily mortgage insurance to build-to-rent communities which RealtyWire covered on Oct. 15. More policy coverage is in our Housing Market section.
