Housing and the Government Shutdown

HUD released a 67 page document last week entitled “HUD FY2013 Contingency Plan for Possible Lapse in Appropriations.”  Wall Street Journal housing reporter Nick Timiraos tweeted today that the “HUD contingency plan says FHA loans should still be available during government shutdown.”  The government shutdown is referred to repeatedly within this document as an “appropriations lapse.”

Page 8 addressed the Office of Housing, saying that work which continues during a shutdown includes the performance of functions where the failure to perform those functions would result in an imminent threat to the safety of human life or the protection of property. These activities are associated with FHA’s portfolio of insured mortgages…[and] administering the portfolio of FHA insured loans.

Ginnie Mae’s role in the secondary mortgage market is also deemed vital to the stability and liquidity of the primary market.   The documents states that an interruption in the opreations would create immediate and significant market disruption that would lead to financial losses for investors and increased mortgage rates for government-insured mortgage loans.  Ginnie Mae may incur obligations and continue its operations during an appropriations lapse under an emergency exception.

New deadline dates for the submission of applications to HUD will be issued in order to “ensure basic fairness to all potential applicants.”

The entire document can be found here.

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