The Department of Housing and Urban Development published a contingency plan for a possible lapse in funding, should budget negotiations on Friday fail and the government is forced to shut down.
“In the event of a government shutdown due to a lapse in appropriations, most Federal employees are required to stop work because no funds would be available to pay staff and the government is prohibited from accepting voluntary services,” said the agency.
According to the plan, the HUD would need four hours to complete the shutdown. Of the its 9,700 employees, 846 would continue to work due to the functional activity they perform. “HUD anticipates that a modest number of employees would be called in on an intermittent basis to work solely on excepted activities,” said the agency.
The Office of Single Family Housing will not endorse new loan and only operations necessary to maintain FHA’s existing portfolio, including maintenance issues relating to the health and safety of REO inventory will be conducted.
Due to Ginnie Mae’s vital role in the stability and liquidity to the marketplace, it will continue to fulfill its obligations.
“An interruption in the operations would create immediate and significant market disruption that would lead to financial losses for investors and increased mortgage rates for government-insured mortgage loans,” said the agency.
View a copy of the plan here.
Update: NRMLA posted a copy of an FAQ from FHA on the impact of a government shutdown.