I declined my Houston offer (in poetry) yesterday, but from the phone calls I had, it seemed like funding was a bit in flux, as their English department was asked to restructure their writing courses (AKA the ones grad students teach). Initially, I was told they were admitting 3 in poetry MFA, 3 in fiction MFA, 3 in poetry PhD, and 3 in fiction PhD. I wouldn't be surprised if they figured out a way to fund additional students, since that was the low-end of their normal cohort size.
That being said, if you have to reneg on an offer, it is what it is. People do it.