FHA Lenders Operate Through the Federal Shutdown | Bedford Corners Real Estate

Federal direct and guaranteed housing loan programs funded by the Federal Housing Administration are operating at a level after the federal government closed its doors and the US Department of Agriculture housing programs have shut down altogether

Some 350 of the 9,300 employees at HUD remain on the job and the Office of Single Family Housing is  maintaining the minimum level of operations necessary to support FHA’s existing portfolio of loans, however most support services for the program, such as prequalification, approving lender applications and re-certifications, will cease.

Larger lenders who have been delegated authority to process FHA applications are unaffected by the shutdown, said Mike Copley, head of Retail Money-Out Products for TD Bank.  Hre said borrowers who are in process of getting a loan as well as those who are getting ready to apply should have no hold-up due to the government shutdown.   “Delegated lenders can make decisions and approve loans.  The only problem borrowers might have is if they are working with a smaller lender who has not been delegated authority by FHA.

Jumbo loans might face a greater problem, he said.  TD Bank requests a copy of applicants’ tax returns directly from the IRS to verify income.  “We will go as far as we can go with jumbo applications in hopes that by the time we need to verify income the government will be up and running again.” said Copley, noting that the last government shutdown lasted only 21 days.





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