On Tuesday, following instructions from the Department of Housing and Urban Development, Houston rescinded housing vouchers from more than 900 households that been previously awarded the coveted subsidy.

None of the families currently living in subsidized apartments in Houston lost their vouchers from the cuts, which came after HUD warned the Houston Housing Authority (along with other housing authorities around the country) to plan for a voucher budget shortfall of $9 million.

“Your housing authority is expected to take every possible action to reduce costs,” HUD analyst Karen Schleper wrote to the authority on Friday, in a letter published by the Houston Chronicle. The cuts will force those 900-plus low-income families to change their plans or pay hundreds more in monthly rent.

Rents have continued to rise but the federal budget, which is expected to be funded by Congress this week through a “continuing resolution” that maintains the previous year’s levels of spending, isn’t keeping pace. If HUD funding continues at current levels, vouchers for more than 100,000 households could go unfunded in 2017, according to the Center on Budget and Policy Priorities—an impact worse than the 2013 sequestration cuts. In light of general uncertainty around the budget, HUD directed the HHA to expect a de facto cut of 3 percent for the calendar year.

The families in question had been given the vouchers earlier this year, but hadn’t yet finalized their housing arrangements. “It’s heartbreaking,” says Tory Gunsolley, the president and CEO of the Houston Housing Authority. He says it can be difficult for tenants to find landlords who accept vouchers in Texas, he explained, where discrimination against voucher-holders is legal. “If you give somebody 90 days, there’s not a sense of urgency, so they’ll look and try to judge their options.”

Nationally, the voucher program is by far the largest source of assistance to low-income renters, but it’s chronically underfunded and available to only a quarter of eligible households. In Houston, the problem is even worse. Out of the more than 400,000 households in the Houston area thought to qualify for vouchers, only 18,000 receive them.

The announcement comes eight months after the HHA opened its housing voucher waitlist for the first time in four years. The authority received more than 68,000 applications, and selected 30,000 for the waitlist.

Despite its generally modest housing prices, the city has an extreme shortage of affordable, available units for extremely low-income households. On that metric, the National Low Income Housing Coalition rates Houston the third-worst city in the country for poor renters.