October 11, 2013
The FHA and HUD are still processing FHA loan paperwork during the government shutdown. While there may be some confusion about the FHA loan program since it is run by a federal agency, borrowers and potential FHA loan applicants should know that FHA loan applications are still being accepted and processed.
The FHA and HUD issued guidance about how the FHA will operate during the shutdown. A document called the HUD Contingency Plan states, “All excepted staff will be performing functions associated with multi-year or no-year credit reform financing (“x-year”) appropriations, and are necessary to administer transactions for which a commitment has been made; administering the portfolio of FHA insured loans (collecting premiums, paying claims); or fulfilling obligations associated with Housing’s project-based rental assistance programs. In addition, “excepted” employees will be performing functions related to the protection of government property.”
Additionally, the HUD contingency plan specifically addresses the FHA Single Family Mortgage Loan program, stating, “The Office of Single Family Housing will endorse new loans, with the exception of Home Equity Conversion Mortgages (HECM) and Title I loans, under current multi-year appropriation authority in order to support the health and stability of the U.S. mortgage market. (FHA endorsements currently represent approximately 15% of the market.) Approximately 80% of FHA loans are endorsed by lenders with delegated authority. The remaining 20% are endorsed through the FHA Homeownership Centers, leveraging FHA staff with a contractor that works on-site.”
Borrowers should take note of the HECM exception–if you are concerned that your pending HECM or Title I loan might be affected by the government shutdown, contact the FHA and your loan officer directly for assistance.
Furthermore, “The Office of Single Family Housing will maintain the minimum operations necessary to support FHA’s existing portfolio by operating both the FHA Call Center and the National Servicing Center’s Call Center, the payment of claims, servicing Secretary-held notes and mortgages, and ensuring the continuity of FHA’s REO disposition process, which includes addressing REO health and safety violations and paying related contractor invoices in accordance with the Prompt Pay Act.”
That means telephone support is still available via the FHA Call Center–borrowers with questions or concerns should contact the FHA Call Center directly for assistance.
Do you have questions about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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