May 28, 2020

Vimeo Channel YouTube Channel

FHA Loans And The 2019 Government Shutdown

FHA Loans And The 2019 Government Shutdown

At the time of this writing, the partial government shutdown continues and we are seeing more headlines about the services affected, including certain kinds of home loans.

Specifically, home loan applicants seeking USDA mortgages are locked out of the process for the duration of the shutdown according to a variety of sources. Some potential USDA borrowers were caught in the middle of their transactions when the government shut down, and the media reports stories of those left more or less in limbo until the current situation is resolved.

So what does this mean for FHA mortgage loans?

FHA Mortgage Loans Are Still Available During The Government Shutdown

Forward mortgages will continue to be serviced during the shutdown as previously reported here and elsewhere. But there are some important things you should know. Reverse mortgages are completely unavailable during the shutdown.

FHA loans that cannot be processed using automated means may be delayed, and borrowers who require manual underwriting due to FICO score issues or other concerns should be prepared for a wait.

Borrowers should know that FHA condo project approvals under DELRAP, the Direct Endorsement Lender Review And Approval Process, will still move forward. Condo projects that require review under the HUD Review And Approval Process or HRAP will not move forward at all during the shutdown.

This may be confusing to some FHA loan applicants; why are FHA mortgage loans available during the government shutdown while USDA loans are not? Aren’t they both government-backed loans and doesn’t the government shutdown affect both government agencies the same?

In short, no, the shutdown does not affect the FHA the same as it does the USDA loan program. Both government agencies have their own contingency plans to deal with such circumstances, but those plans aren’t standardized for all government offices.

Instead, each agency must pick and choose the most critical operations needed to remain functioning. The FHA’s plans address their most critical needs, which includes the ability to allow new FHA home loans that can be underwritten automatically to move forward.

Home loans that require additional FHA involvement may be delayed, and that’s a factor all with lower FICO scores or “thin credit” (a small credit history or only one or two credit accounts that don’t have a long history) should be aware of-there may be additional waiting time for such loans until the government shutdown impasse can be resolved.

Bottom line-it’s not safe to assume you won’t be able to get a home loan with an FHA mortgage, but you should definitely talk to a participating lender to discuss processing times and other concerns that may be active while the partial shutdown continues.

Bruce Reichstein - FHA News Author

By Bruce Reichstein

January 7, 2019

Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.

Connect with Bruce:


Browse by Date:

About was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

5850 San Felipe Suite #500, Houston, TX 77057 281-398-6111. is privately funded and is not a government agency.

Share This