December 29, 2018
Are FHA home loans available during the government shutdown? The answer is yes in many cases, with the exception of Reverse Mortgages and Title I loans. FHA Condo loans may be affected by the government shutdown depending on whether or not the condo project was on the FHA approved list prior to the shutdown or not.
The FHA and HUD official sites have notices stating that the websites will not be updated until the government reopens, and many functions of the FHA and HUD will be limited or unavailable.
According to HUD.gov, there are a list of guidelines you should know during this time that will affect how FHA loans are handled. The official site states that HECM loans and Title I loans cannot be endorsed during the shutdown:
“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 multiyear loan guarantee commitment authority in order to support the health and stability of the U.S. mortgage market. “
“Endorsements that require assessment by an FHA underwriter will not be able to be finalized during a lapse in appropriations; however FHA will support manual endorsement actions including case number cancellations, case number reinstatement, case number transers, and resolution of the hold tracking queue.”
The official site reminds borrowers and lenders alike that FHA staff are not available to process condominium project approvals under the HUD Review and Approval Process (HRAP) until the government reopens.
However participating FHA lenders are permitted to “continue processing condominium approvals under the Direct Endorsement Lender Review and Approval Process (DELRAP)”.
In general, “actions that require intervention by FHA personnel will either be delayed or suspended”.
Those who seek housing counseling from the FHA should know that the government shutdown affects these operations, too. The FHA Office of Housing Counseling (OHC) will not have staff available and cannot process “requests to draw down grant funds from the Line of Credit Control System (LOCCS)”. That said, the FHA Housing Counseling system (HCS) will be “operational on a limited basis”.
Speak to a loan officer if you are not sure how the government shutdown may affect your loan. Some borrowers may not be affected at all, others who are trying to get a condo project on the FHA approved list or need some form of FHA intervention may be required to wait depending on the nature of the issue and the duration of the shutdown period.