Accepted letter for Ph.D. in February, but now they say they don't have funding! Is that possible?
If they did not say they had funding at the time of the offer, then it is quite likely they do not have funding now. This is especially true in the humanities. Cases where the offer include a statement about funding generally mean the department has funding, but it is not unheard of for things to happen. Generally statements about funding include lots of conditional clauses protecting the department in case things fall through. In the humanities funding for a PhD is much harder to get. It is worth asking about the possibility of teaching.