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Are FHA home loans, which are government-backed mortgages offered by participating commercial lenders, still available during a government shutdown or partial shutdown? This is an important question and borrowers or potential borrowers should know the facts.

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Are FHA Home Loans Available During a Government Shutdown?

Are FHA Home Loans Available During a Government Shutdown?
January 16, 2019 - Are FHA home loans, which are government-backed mortgages offered by participating commercial lenders, still available during a government shutdown or partial shutdown?

This is an important question and borrowers or potential borrowers should know the facts before making decisions about not house hunting or applying for a less advantageous mortgage loan. In some cases an FHA mortgage loan may be totally unaffected, in others there may be certain complications that require additional time to sort out.

FHA Home Loans Are Still Available During the Government Shutdown

The FHA/HUD official site has a notice saying that due to the shutdown at the end of 2018, HUD is closed and HUD/FHA websites will not be updated.

However, the FHA/HUD contingency plan for a government shutdown details the following, which applies specifically to single-family home loans that a typical house hunter might apply for such as an FHA new purchase loan, FHA One-Time Close construction loan, cash-out refinancing, etc.

According to the FHA/HUD official site:
  • The Office of Single Family Housing will endorse new loans, with the exception of Home Equity Conversion Mortgages (HECM) and Title I loans, under current multi­-year loan guarantee commitment authority in order to support the health and stability of the U.S. mortgage market.
  • Endorsements that “require assessment by an FHA underwriter” will not be able to be finalized during a lapse in appropriations; however, FHA will support manual endorsement actions including case number cancellations, case number reinstatement, case number transfers, and resolution of the hold tracking queue...
  • FHA will answer questions related to the efficacy of specific borrower data in CAIVRS to avoid borrowers being denied credit due to incorrect information on FHA loans...
It should be noted that during the government shutdown, FHA cannot process condominium project approvals, but according to the FHA/HUD official site, “...lenders will be permitted to continue processing condominium approvals under the Direct Endorsement Lender Review and Approval Process (DELRAP).”

If you are unsure how the government shutdown affects your FHA home loan or your ability to get the loan you seek, contact a loan officer to see what your current options are and how the shutdown may affect your transaction where applicable.

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