In this blog, we will discuss and cover the government shutdown affecting HUD on FHA loans. We are going into the fifth week of the government shutdown. This partial government shutdown affecting HUD. HUD is the parent of FHA. 25% of the federal government has been shut down for over 30 days. This shutdown is affecting an estimated 800,000 federal workers.
Government Shutdown Affecting HUD on FHA Loans Entering Fifth Week
We will be entering the fifth week. President Donald J. Trump is rigorously trying to work with Democrats in Congress for talks to end this shutdown with talks of funding our Border to the South. The two leaders of the Democratic Party, Nancy Pelosi and Chuck Schumer want nothing to do with negotiation talks with President Trump. Trump is not willing to reopen the government without funding for our Southern Border. He is insisting that he will not reopen the government without funding for Border security.
Democrats Control Of U.S. Housing Of Representatives
Democrats got control of the United States House Of Representatives on January 3rd, 2019. The New Congress was sworn in on January 3rd, 2019. They are now in control of the chamber.
House Democrats under the leadership of Nancy Pelosi agreed to end the 2019 partial government shutdown. They have voted on two propositions to fund the federal government. The first bill passed with a majority vote of 241 to 190 for funding the federal government. The House bill includes a spending package that consists of 6 of 7 Fiscal Year 2019 spending bills. This includes budgets funding housing which is governed by FHA and USDA. See NLIHC’s January 2 Update for more information.
Stop Gap Funding Bill Passed By Congress
The U.S. House Of Representatives has also passed a stopgap funding bill by a vote of 239 by 192. This bill would give the Department of Homeland Security funding to operate until 8th February 2019. This bill brought a lot of mixed controversy to Department of Homeland Security due to border wall funding. These two bills were not brought up to the U.S. Senate by Senator Mitch McConnell, the Majority Leader of the U.S. Senate. The reason Senator McConnell did not present these bills to the Senate Floor for a vote is due to President Trump’s threat of vetoing both bills.
Steps To Ending Government Shutdown By Politicians
Nancy Pelosi and Chuck Schumer, the Democratic Leaders of Congress, had a meeting with President Donald Trump. The January 4th, 2019 meeting was to hopefully come to a mutual resolution to reopen the government. Unfortunately, there was no deal made. News that President Trump threatened that he will keep the government closed until he gets Border Security Funding hit the airwaves. Even with this stern threat by President Trump, Pelosi and Schumer was not going to budge. There were more meetings after the initial meeting with the President but the talks were unsuccessful.
Government Shutdown Affecting HUD Processing Section 8 Payments To Landlords
The U.S. Department Of Housing And Urban Development notified over 1,500 landlords. This letter sent out on 4th January 2019 states the plan HUD has in place during the shutdown. Many property owners have only section 8 tenants who are dependent on the checks from HUD in order to keep operating. HUD officials sent out the letters to landlords in hopes of working with landlords not to evict tenants.
Section 8 Rental Vouchers Are Under Threat
Thousands of tenants covered by Section 8 Project-Based Rental Assistance program, Section 202 (for the elderly folks) and Section 811 (for people with disabilities) can potentially get evicted by landlords. The letter by HUD state that the Department of Housing and Urban Development will be making payments if they have the budget authority from preceding years appropriation funds and/or recaptures. HUD claims that they have enough resources for January 2019 to fund operations. However, it is uncertain how much longer the funds will be available as the shutdown goes to its second month.
Government Shutdown Affecting HUD In Days And Weeks To Come
This no doubt will have a ripple effect to property owners where they can get delinquent on their mortgage payments and potentially be facing foreclosure. Government Shutdown Affecting HUD will be having more impact in the coming days, weeks, and months. Government Shutdown Affecting HUD is effecting homeowners in them being able to pay their mortgage payments. Government Shutdown Affecting HUD is also affecting home buyers with their FHA Loans.
USDA Loans Affected By Shutdown
USDA will not be issuing any funds on Section 504, Section 514, and Section 502 funding. Lenders will not be able to close on USDA loans during the government shutdown. Borrowers who have USDA Loans will most likely experience delays in closing on their mortgage. If the shutdown continues they may need to switch to a different loan program. Most sellers are aware of USDA not processing loans during the government shutdown and are refusing home buyers with USDA pre-approval letters. Rental assistance voucher payments for lower-income tenants may also be affected by the 2019 partial government shutdown. This government shutdown is the longest closure of our government in history. It is affecting an estimated 800,000 workers. It can also have an impact on private sectors like mortgage companies. Stay tuned. Gustan Cho Associates will keep you posting on any changes in the coming days.
