The Department of Housing and Urban Development will continue to process single-family loans with limited staff during the government shutdown, according to the most recent version of its 2013 contingency plan.
“FHA will be able to endorse single family loans, with the exception of Home Equity Conversion Mortgages (HECM) and Title I loans, during the shutdown,” said the agency's contingency plan, updated on Tuesday.
“A limited number of FHA staff will be available to endorse new loans. Due to limited staff, the time to endorse the cases may be extended,” the plan said.
An earlier version of HUD's plan was revised to reflect their new position.
“The HUD Contingency plan posted on Friday mistakenly included incorrect information about a potential shutdown's impact on the FHA single-family loan program,” HUD said in a statement, according to news reports.
“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.”
In the updated plan, HUD also said it does not anticipate a brief government shutdown having a major impact on the housing market.
“Because we are able to endorse most single-family 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,” said HUD's plan.
However, HUD warned that home sales could be affected.
“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,” said the plan.
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