HUD to Lenders: Prepare for Delays, Temporary Closures

As a result of the sequester that will lead to budget cuts faced by government agencies, the Department of Housing and Urban Development is planning for seven days of employee furloughs between May and September 2013.

The department will face closure for those seven days as a result of the sequestration, which requires HUD to reduce its salaries and expenses by $66.6 million.

In a letter to multifamily industry partners sent this week, HUD Commissioner Carol Galante informed lenders there will be delays within the department.

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“At this time, the Department of Housing and Urban Development is taking every step to mitigate the effects of these cuts, but based on our analysis, it is likely that your organization’s business processes may be affected,” the letter states. “For example, the sequester will require Department to furlough staff and take reductions for systems maintenance and in other areas which may result in delays in processing mortgage insurance applications.”

The furloughs and other measures could result in delays in loan closings, the letter continues.

While the dates are subject to change based on negotiations with the federal employees union that represents government employees, HUD confirmed the department is tentatively planning to take seven furlough, unpaid days including May 10; May 24; June 14; July 5; July 22; Aug. 16; and Aug. 30.

HUD is also studying its commitments on contracts, equipment, travel and training as a means to reach the required cuts.

Written by Elizabeth Ecker

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  • When it gets to the end of the year (before Christmas) I crank it, because I know I’m running out of time to get a loan funded by year’s end AND the fact there are fewer folks available to help. But guess what, its always my busiest time of the year because I want to get things done and will do extra work to GET it done. I don’t see this affecting our business, so I have to wait one more day to get a case number? Been there, done that, in fact I’ve come to accept it.

  • Goodness, if this is all it takes to save the tax payers 66 million dollars I would like to suggest tinkering with 14 days of “closures and delays” instead.
    Oddly enough, it ends up in the hands of the “federal employees union”. Too strange for any more words.

  • If you check you’ll see that all 14 furlough days are Fridays when many employees find a way to check out early anyway. It probably won’t make any difference HUD’s overall operation and tax payers save millions. Looks like the sequestration in this case is a good idea.

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