In preparation for the government shutdown pending a budget agreement among members of Congress, the Department of Housing and Urban Development has released contingency plans to inform lenders of the potential impact to its lending and operations.
While the agency expects it would furlough some staff and put some operations on hold, it specified in a plan released Friday that its Office of Single Family Housing will continue to endorse new forward loans “in order to support the health and stability of the U.S. mortgage market,” but will halt insurance for Home Equity Conversion Mortgages due to a statutory HECM cap.
HUD said in the plan it would maintain minimum operations necessary to support its existing Federal Housing Administration portfolio by continuing to operate its FHA call center and national servicing call center as well as its REO processes.
It also stated Ginnie Mae would continue operating as a necessary measure as it is plays a vital role in the secondary mortgage market.
The agency would continue to operate through multi-year appropriations should a government shutdown occur due to lack of funding at the beginning of the fiscal year starting October 1.
Lawmakers failed Monday to come up with a stop-gap bill to keep the government funded into the new fiscal year. The shutdown will temporarily halt as many as 800,000 federal workers, according to reports.
Editor’s note: This article has been updated to reflect HUD’s specification that FHA will suspend insurance to HECM loans during the shutdown.
Written by Elizabeth Ecker