Will the 2013 Contingency Affect Your Real Estate Business?
The Impact of the 2013 Contingency Plan as It Relates to Real Estate
The Office of Management and Budget (OMB) provides agency guidance according to the 2013 Contingency Plan for procedures during the government shutdown.
The FHA (Office of Single Family Housing) will continue to endorse new loans however a limited staff will be available to underwrite and approve loans. FHA will not approve any lender applications and will not recertify any lenders.
Loan closings will occur during the shutdown if an insurance commitment was issued before the government shutdown. FHA will have a limited staff and delays in the processing or closing of FHA insured loans are expected. All FHA underwriting and processing requirements will remain in force and no loan may proceed that cannot fulfill those requirements. If the lender is in pre-closing the FHA staff will not be available to underwrite and approve loans. The FHA is expected to operate at a slower pace due to staff reductions and furloughs which will impact the processing of loans.
Foreclosure processes will continue for homeowners with FHA insured mortgages.
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.
FHA will continue to endorse new mortgages on multifamily operations however it will not be able to underwrite them. Additionally, no condominium projects or HRAP condominium packages will be approved during the shutdown.
During the first 10 business days of the shutdown no construction draws, change orders or construction inspections will be processed or approved.
According to a HUD spokesman “The impact on the housing market is not expected to be significant as long as the shutdown is brief. If the shutdown lasts and our commitment authority runs out, potential home owners 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 we’ve been experiencing”.
