HUD Issues Contingency Plan Due to Government Shutdown

HUD recently released its contingency plan and related FAQs to address a possible lapse in appropriations due to the government shutdown.  HUD operations and staffing, including at FHA and Ginnie Mae, will be reduced significantly and delays with housing-related federal government programs are expected.

In summary, the contingency plan details that the following will continue during a lapse of appropriations (albeit with delays):

• Many of HUD’s activities supporting FHA’s portfolio of insured mortgages, as well as Ginnie Mae’s work within the secondary mortgage market;
• Many of HUD’s programs addressing imminent threats to the health and welfare of HUD tenants and children where such grant funding has been obligated before the lapse; and
• Monthly subsidy programs such as the public housing operating subsidies, housing choice vouchers subsidies, and multifamily assistance contracts for as long as the funding remains available.

On the other hand, the contingency plan provides that during a lapse of appropriations:

• FHA will not endorse Title I loans;
• FHA will not endorse HECM loans.  However, FHA will continue to perform current Ginnie Mae guaranteed HECMs to buy out loans, remit payments to investors, and fund borrower draws;
• FHA will pause new activity on multifamily loans;
• Nearly all of HUD’s fair housing activities will cease; and
• The operations of the monthly subsidy programs detailed above could be interrupted if funding runs out.

How long the government shutdown will last is unclear.  A brief shutdown may only result in a minor inconvenience, but a longer one would have significant effects.  WBK continues to monitor the situation and will provide updates accordingly.