Contingency plan, Federal Housing Administration, Federal takeover of Fannie Mae and Freddie Mac, fha, FHA Loans, Government shutdown, Kentucky Mortgage Loan, Loan Guaranty Program, Mortgage loan, United States Department of Agriculture, United States Department of Housing and Urban Development, VA loan
HousingWire – Christina Mlynski
In the event of a government shutdown, most Federal employees are required to stop working because no funds would be available to pay staff, ultimately ceasing most housing agency’s functions. Consequently, the Federal Housing Administration will be unable to endorse any single-family loans and staff will be unavailable to underwrite and approve new loans, according to a Department of Housing and Urban Development’s latest report. If an application for an FHA-insured loan is not approved by the time of the government shutdown, it will not make it through the system, impacting affordability opportunities for homeowners.
Given that government-backed mortgages account for more than 90% of loans, the shrinkage in volume flow would critically hit the housing market. When put into perspective, more than 9,000 HUD employees, only 3.8%, or 350 employees, will be able to work, according to HUD. Nonetheless, it’s important to note that there…
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