FHA, VA loans ‘safe’ during government shutdown

WASHINGTON – Monday, Sept. 30, 2013 – Contrary to widespread media reports, new Federal Housing Administration (FHA) single-family home loans will be processed if the expected government shutdown occurs at midnight.

Florida Realtors® confirmed details contained in a Housing and Urban Development (HUD) contingency plan posted online. According to George Gonzalez, a deputy press secretary at HUD, the Office of Single Family Housing will endorse new loans and maintain the minimum operations necessary to support FHA’s existing portfolio through the FHA Call Center and the National Servicing Center’s Call Center.

Already scheduled closings on multi-family projects with firm commitments will proceed. Some services, such as the processing of change orders or construction inspections, will be affected during the first 10 business days of the shutdown.

VA home loans will continue to be processed as well, according to the U.S. Department of Veterans Affairs. Florida Realtors could not confirm by press time if this includes new loans as well as loans already in the system. The Veteran Benefits Administration, which oversees loans and the National Call Centers, among other things, employs 21,237 people. Funding is available to support all employees for some period of time.

Flood insurance

In other news, Florida Realtors continues to follow efforts to delay implementation of the Biggert-Waters Act of 2012, which will trigger crippling flood insurance rate increases for thousands of Florida property owners.

Late last Friday, Florida Congressman Rich Nugent introduced legislation to delay increases in flood insurance premium rates until an affordability study required under the act is completed.

“The legislation will also require that if the study finds the new rates are not affordable, then the Florida Emergency Management Association must make recommendations about what changes Congress should make,”according to a statement Rep. Nugent issued on his website.  Congress would then be required to vote up-or-down on the recommendations. If either chamber rejects the changes, the new flood insurance rates would be delayed for at least six months.

Finally, the National Association of Realtor’s (NAR) Flood Insurance Presidential Advisory Group meets later this week in Washington, D.C. Florida Realtors’ interests are represented by members Dean Asher, 2013 Florida Realtors president; Moe Veissi, past president of Florida Realtors and NAR; and Orlando Realtor and NAR Director Bob Caldwell.

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Reprinted with permission. Florida Realtors®. All rights reserved.

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