Government shutdown won’t shut down FHA

Loans will be approved at slower pace unless impasse drags on

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Despite reports to the contrary, the Federal Housing Administration will not stop processing loan applications in the event of a government shutdown at midnight tonight. In what appears to be a reversal of an earlier position stated last week, the U.S. Department of Housing and Urban Development (HUD)'s Office of Single Family Housing will continue to endorse new loans "in order to support the health and stability of the U.S. mortgage market" should there be a lapse in appropriations, the agency said in its latest contingency plan. "The single-family aspect of FHA is funded through multiyear appropriations," a HUD spokesman told Inman News. Therefore, while there will be some reductions in staff and furloughs, that part of the FHA will be able to operate, albeit "at a slower pace," he said. FHA's multifamily operations, on the other hand, are funded on a year-by-year basis, and therefore "while FHA will be able to endorse new mortgages, it will not be able to underwrite them...