Many of the Federal Housing Administration’s (FHA) functions will be suspended as a result of the partial federal government shutdown. FHA released a breakdown of what functions its Office of Single Family Housing and its mortgage insurance program will be impacted pertaining to lending, insurance endorsements, transactions and more.
The FHA detailed which functions the office will continue operating during the shutdown, noting that they will have longer wait times because of staffing limitations, and which functions will be halted until further notice. The agency also offered instructions for what actions lenders should take pertaining to certain processes during the interim.
Among the loan and transaction processing functions that the FHA stated it will continue operating are:
- Notice of Return violation reviews on pre-endorsement loans;
- FHA appraiser roster look-up functionality;
- FHA 203(k) consultant roster look-up functionality;
- FHA-approved non-profit look-up functionality; and
- Insurance endorsements for Title II forward mortgages only.
- Condominium project approvals under the Direct Endorsement Lender Review and Approval Process (DELRAP);
- Manual endorsement actions: case number cancellations, reinstatements, and transfers; resolution of the Holds Tracking queue; and
- TOTAL Mortgage Scorecard evaluations.
- Submissions of upfront mortgage insurance premiums (MIPs) for new endorsements (note that lenders are required to submit monthly MIP during the shutdown);
- MIP refunds to borrowers;
- Claims filing and payments;
- Conveyance of properties;
- Home Equity Conversion Mortgage (HECM) payments to borrowers;
- Department of Housing and Urban Development (HUD) Real Estate Owned listings; and
- Servicing of HUD Secretary-held notes and mortgages.
In highlighting lender certification, monitoring and quality assurance processes that will be unavailable for the duration of the shutdown, the FHA took care to note what lenders should do in the meantime:
- “Annual recertification: lenders must continue to complete the required annual certification process in accordance with existing policy in the FHA Single Family Housing Policy Handbook 4000.1 (SF Handbook); however, the submission will not be reviewed or approved for the duration of the shutdown;
- Application for FHA lender approval: applications may be submitted in accordance with existing policy in the SF Handbook; however, the submission will not be reviewed or approved for the duration of the shutdown;
- Request for post-approval changes: may be submitted in accordance with existing policy in the SF Handbook; however, changes requiring FHA action will not be reviewed for the duration of the shutdown;
- Requests for supplemental mortgage authority: may be submitted in accordance with existing policy in the SF Handbook; however, the submission will not be reviewed for the duration of the shutdown; and
- Quality assurance processes (loan and lender monitoring activities) will not take place for the duration of the shutdown.”
The following loan and transaction functions also will be suspended during the shutdown:
- FHA appraiser roster new application, reinstatement, and recertification processing;
- FHA 203(k) consultant roster new application, reinstatement, and recertification processing;
- Non-profit new application, reinstatement and recertification processing;
- Condominium project approvals under the HUD Review and Approval Process (HRAP);
- Test case loan submission; and
- HECM collateral risk assessment issue assistance.
Most servicing, claims and asset management functions will continue to be available, with the following exceptions:
- HUD Broker Name and Address Identification Numbers (NAIDs) application processing; and
- Extension and variance processing in the Extensions and Variances Automated Requests System (EVARS) by the National Servicing Center.
All but one of the office’s technology systems will be available, but with limited capability for actions requiring FHA staff interventions. The Electronic Appraisal Delivery (EAD) portal onboarding for new lender users will be the only nonoperational system during the shutdown.
The Department of Housing and Urban Development released a contingency plan offering more detail about how the shutdown will impact the FHA’s single and multifamily housing programs and several other divisions and operations within the agency.