The Federal Housing Administration will continue to process applications for government-backed mortgage during a government shutdown, the Department of Housing and Urban Development has said
The Federal Housing Administration will continue to process applications for government-backed mortgage during a government shutdown, the Department of Housing and Urban Development said Monday.
HUD said on Friday that loan applications in process during a shutdown would be placed on hold. However, it revised that plan over the weekend, according to a CNN report. HUD’s new plan said the agency would continue to process loans “in order to support the health and stability of the U.S. mortgage market.” Nearly half of all home mortgages in 2012 were FHA loans, CNN reported. The agency insures about 60,000 loans a month.
Fannie Mae and Freddie Mac, which pay their operating expenses through fees charged to lenders, will not be affected by a shutdown, according to CNN. The FHA, however, will furlough about 96% of its staffers in the event of a shutdown.
“There will be a limited number of exempted FHA staff available to underwrite and approve single family home loans,” Jereon Brown, Deputy Assistant Secretary for Public Affairs, told CNN. “The underwriting and approval process will definitely be slower than normal.”
