US Government Shutdown and HUD Financing – What’s the Impact?

Although we have taken proactive steps with our clients to make sure that their HUD loans will proceed as planned, it’s worthwhile sharing this set of FAQs with you (from the White House’s contingency planning page) to help you understand the impact of the shutdown and HUD Loan Processing. Bottom line on top – when in doubt, call your lender.

FHA Single Family Housing –  Government Shutdown FAQs

FHA’s Resource Center and National Servicing Center’s (NSC) Call Center will be available to answer questions. If the questions need to be elevated to HUD staff, the questions may not be answered until the staff returns to work.
The call centers will be provided with the contact information for the essential staff available during the government shutdown to handle health and safety issues.
Q: Will FHA endorse single family loans during a shutdown?
A: FHA will be able to endorse single family loans during the shutdown. A limited number of FHA staff will be available to underwrite and approve new loans.
Q: Will my FHA-loan still close?
A: The decision to close or not will be decided by each individual lender, so you should contact your lender.
Q: How will this impact the housing market?
A: Because we are able to endorse loans, we don’t expect the impact on the housing market to be significant, as long as the shutdown is brief. If the shutdown lasts and our commitment authority runs out, we do expect that potential homeowners will be impacted, as well as home sellers and the entire housing market. We could also see a decline in home sales during an extended shutdown period, reversing the trend toward a strengthening market that we’ve been experiencing.
Q: What about homeowners with FHA-insured mortgages facing foreclosure?
A: Most loss mitigation for homeowners facing foreclosure (including FHA loan modifications, FHA-HAMP, etc.) will continue.
Q: Will FHA have staff available to answer questions if there is a government shutdown?
A: Limited FHA staff will be available to respond to questions, emails or other correspondence.
Q: Can I get an FHA case number?
A: Yes. Lenders will be able to obtain an FHA case number from the FHA Connection.
Q: Will FHA insure any loans during the government shutdown?
A: Yes, FHA will endorse single family loans; however, it may take a little longer to endorse.
Q: Can lenders with Lender Insurance (LI) approval continue to insure loans during the government shutdown?
A: Yes as long as FHA does not run out of commitment authority. If FHA runs out of commitment authority, the lenders’ LI Approval will be temporarily suspended.
Q: Will the Credit Alert Interactive Voice Response System (CAIVRS) be available during a government shutdown?
A: Yes. CAIVRS will be available to determine if a borrower has a delinquent federal debt.
Q: Will the FHA TOTAL Scorecard be available for lenders?
A: Yes. FHA TOTAL Scorecard will be available. Lenders can close loans.
Q: Can a lender submit loans for approval if the lender is in pre-closing?
A: No. FHA staff will not be available to underwrite and approve loans.
Q: Is FHA collecting the Upfront Mortgage Insurance Premiums (UFMIP) if a lender closes any loans during the government shutdown?
A: Yes.
Q: Is FHA collecting the monthly Mortgage Insurance Premiums (MIP)?
A: Yes. Lenders are required to submit monthly MIPs to FHA during a government shutdown.
Q: Can lenders submit packages for condo approvals?
A: No. FHA will not approve condo projects during a government shutdown.
Q: Can lenders file a claim and convey a property if there is a government shutdown?
A: Yes. Lenders can file a claim and convey a property. The properties will be assigned to an Asset Manager and listed for sale. Claims will be paid.
Q: Will FHA continue to pay partial claims to facilitate workout agreements to avoid additional foreclosures and increase in homelessness in my city, municipality or town?
A: Yes.
Q: Who handles safety issues with a HUD Home?
A: FHA has Field Service Managers (FSM) who are responsible for ensuring that properties are safely secured. If there is an issue that the FSM cannot handle, FHA will have some essential staff that will ensure that all the safety issues are addressed.
Q: Will HUD Homes be listed?
A: Yes. FHA’s Asset Managers (AM) will handle the sale of HUD Homes.
Q: Are lenders required to file monthly default reports to FHA?
A: Yes. FHA’s system for collecting the monthly default reporting will be available if there is a government shutdown.
Q: Can lenders submit applications for FHA approval?
A: FHA will not approve any lender applications during the government shutdown.
Q: Will FHA recertify a lender’s FHA approval?
A: No. FHA will not recertify any lenders during the government shutdown.
Q: Will lenders be able to submit audited financial statements to the Lender Assessment Subsystem (LASS)?
A: Yes. LASS will be available during a government shutdown. However, FHA will be unable to review or process any audited financial statements.
Q: Will borrowers receive Mortgage Insurance Premiums (MIP) refunds?
A: Yes. Borrowers will be able to obtain MIP refunds.
Q: Will borrowers receive HECM payments from HUD during a government shutdown?
A: Yes. Borrowers will receive HECM payments.
Q: Will FHA monitor lenders during the government shutdown?
A: No. FHA will not perform any post technical endorsement or Quality Assurance Reviews during a government shutdown.
Industry FAQ’s under a Shutdown
The following HUD/FHA Information Resources will be available during a government shutdown:
Ø HUD/FHA Resource Center: Telephone (800) CALL-FHA 225-5342 or Email: answers@hud.gov
Ø HUD/FHA National Servicing Center: (877) 622-8525
Ø HUD’s primary internet site: www.hud.gov (will not be updated)
Ø The Resource Center FAQ site: www.hud.gov/answers
In the event of a government shutdown, most HUD/FHA staff will not be available to respond to case-specific questions. The Resource Center and the National Servicing Center will still be operational by contract staff who are equipped to answer general inquiries. However, all questions that cannot be answered by contract staff may have to be deferred until the government re-opens.
Please be aware that HUD Staff will not be available to process incoming mail during a government shutdown so business partners should suspend shipment of documents and approval packages during the term of the shutdown. The following are examples of such documents: Submission of FHA Test Cases, HRAP condominium approval packages, NAID requests, etc.
Origination
Q: Will the government shutdown affect the processing or closing of FHA-insured loans?
A: FHA will have limited staff during a shutdown and the processing or closing of FHA-insured loans may be delayed. The longer the shutdown lasts, the more serious the impact will be. All FHA underwriting and processing requirements would remain in force during the government shutdown and no loan may proceed that cannot fulfill those requirements.
Access to FHA Connection
Lenders will be able to access FHA Connection, however FHA Connection interfaces to other systems may not be available, or if available these other systems may not be fully supported so FHA Connection processes may not be fully functional. At this time we do not have complete information on the potential impact on some FHA Connection functionality. More detailed questions and answers below reflect our current best efforts at defining what systems and processes will be available.
Q: Can a lender obtain a new FHA case number?
A: Yes. Lenders will be able to obtain a FHA case number from the FHA Connection. Please note that all FHA underwriting and processing requirements would remain in force on loans originated during the government shutdown regardless of system limitations during the shutdown period
Q: Will FHA TOTAL Scorecard be available for lenders?
A: Yes. FHA TOTAL Scorecard will be available within systems. As noted above, all FHA underwriting and processing requirements do remain in force on loans originated during the government shutdown.
Q: Will lenders be able to get password resets for FHA Connection?
A: Lenders will be able to continue to utilize the automated password reset options on FHA Connection, but resets that require FHA employee direct assistance will not be available.
Q: Will FHA insure any loans during the government shutdown and does this also impact lenders with Lender Insurance (LI) approval?
A: FHA-insured loans (Direct Endorsement or Lender Insurance) will be endorsed during the government shutdown period as long as FHA does not run out of commitment authority.
Q: Can a lender submit loans for approval if the lender is in test case status?
A: No. FHA staff will not be available to underwrite and approve loans.
Q: Can lenders submit packages for condo approvals?
A: DELRAP approvals can continue to be processed, but HRAPS cannot be processed and should not be submitted for processing during the government shutdown.
Servicing
Q: Will lenders be able to submit FHA Mortgage Insurance Premiums during a government shutdown?
A: Upfront Premiums – Yes. Lenders will be able to submit UFMIPs.
Monthly Premiums – Yes. Lenders are required to submit monthly MIPs during the shutdown.
Q: Can lenders file a claim and convey a property if there is a government shutdown?
A: Yes. Lenders can file a claim and convey a property. The properties will be assigned to an Asset Manager and listed for sale. Claims will be paid.
Q: Can lenders submit extension and variance request through the EVARS System?
A: Yes. Lenders will be able to continue to submit extension or variance request through EVARS. However, FHA staff will not be available to process requests on forward mortgages. Requests will remain in the system until the government reopens. Please do not submit duplicate requests.
Q: Can lenders continue to take on-line courses through EClass?
A: Yes. This web-based loss mitigation training program will be available for use. However, non-FHA approved Housing Counseling Agencies cannot receive approval to access EClass until the government reopens.
Please note that responses to the following email boxes will not be provided until the government reopens.
REO/HUD Home Sales
Q: Will I be able to place a bid on a HUD-owned property via the HUD Home Bid site during the shutdown?
A: Yes. FHA contractors will handle the sale of HUD Homes and the bidding site (www.hud.gov/hudhomes) will be available and maintained during the shutdown.
Q: Who can I notify about health or safety issues on a HUD-owned property?
A: The staff at the FHA Resource Center can provide contact information for contractors responsible for the maintenance of HUD-owned properties.
Q: Will HUD Broker Name Address Identifiers (NAIDs) applications be processed?
A: No. Name Address Identifier applications will not be processed during the government shutdown.
Lender Approval/Monitoring
Q: Will FHA’s lenders be able to submit routine compliance reporting to FHA-managed systems?
A: Yes. FHA’s lenders are required to submit routine compliance reporting to FHA-managed systems.
Q: Can lenders submit applications to become an FHA approved lender through the Lender Electronic Assessment Portal (LEAP)?
A: Yes. LEAP will be available during a government shutdown. However, FHA will be unable to review and process lender applications.
Q: Will FHA recertify a lender’s request to renew their FHA approval?
A: No. FHA will not recertify any lender’s status as an FHA approved lender during the government shutdown.
Q: Will lenders be able to submit audited financial statements to the Lender Assessment Subsystem (LASS)?
A: Yes. LASS will be available during a government shutdown. However, FHA will be unable to review or process any audited financial statements.
Consumer FAQ’s Under a Shutdown
The following HUD/FHA Information Resources will be available during a government shutdown:
Ø HUD/FHA Resource Center: (800) CALL-FHA 225-5342 or Email: answers@hud.gov
Ø HUD/FHA National Servicing Center: (877) 622-8525
Ø HUD’s primary internet site: www.hud.gov (will not be being updated)
Ø The Resource Center FAQ site: www.hud.gov/answers
In the event of a government shutdown, HUD/FHA most staff will not be available to respond to case-specific questions. The Resource Center and the National Servicing Center will still be operational by contract staff who are equipped to answer general inquiries. However, questions that cannot be answered by contract staff may have to be deferred until the government re-opens.
Q: How will the government shutdown affect the processing or closing of my FHA-insured loan?
A: The shutdown may delay the processing or closing of your FHA-insured loan. Please contact your lender for the exact status of your FHA loan.
Q: If I’m selling my home to a buyer utilizing FHA-insured financing will I still be able to complete the sale?
A: The shutdown may delay the processing or closing of your FHA-insured loan. Please contact your lender for the exact status of your FHA loan.
Q: Will FHA have staff available to answer questions if there is a government shutdown?
A: Limited HUD/FHA staff will be available but may not be able to respond to case specific questions. All questions that cannot be answered by contract staff at the Resource Center and the NSC will be deferred until the government re-opens.
Q: Who can I contact about a health or safety issue with a HUD-owned property in my neighborhood?
A: The staff at the FHA Resource Center (1-800-CALL-FHA) can provide contact information for contractors responsible for the maintenance of HUD-owned properties.
Q: Will I be able to place a bid on a HUD-owned property via the HUD Home Bid site during the shutdown?
A: Yes. FHA contractors will handle the sale of HUD Homes and the bidding site (www.hud.gov/hudhomes) will be available and maintained during a shutdown.
About Danny Sanchez

Joining Rianne's award-winning team after a successful career as a Program and Operations Manager for a global outsourcing firm (with Fortune 100 companies as his primary clients), Danny has seen The Woodlands grow to what it has become today since 2001. An advocate for innovation and perfecting the Best Possible Real Estate experience, he understands very well that clients always come first. In his own words, "success looks like clients feel that they don't have any needs - because you've more than anticipated them."