While the United States Congress and the White House are in a virtual stand-off over the federal budget, many government-funded programs that affect the Atlanta real estate industry are shut down or facing significant shortages of both staff and funds. With the uncertainty of how long the government shutdown will last, The National Association of Home Builders (NAHB) has compiled a list of programs that have been affected by the shutdown.
The U.S. Department of Housing and Urban Development (HUD) offices closed to the general public at midnight on Monday, Sept. 30, and only programs and activities that are deemed necessary to preserve life and property will continue during the shutdown.
- The Office of Single-Family Housing will continue to endorse new loans as long as the Federal Housing Administration (FHA) does not run out of commitment authority, but there may be some delays in the processing or closing of FHA-insured loans. The total appropriated commitment authority for fiscal year 2013 for single-family programs was $400 billion, or around 1.2 million mortgages. However, the FHA has not disclosed how much of this total amount was available to cover loans during the shutdown.
- Home buyers that are waiting on approval for a mortgage may see significant delays in approval due to the Internal Revenue Service (IRS) being closed. Lenders cannot get verification on the applicant’s income and Social Security number at this time.
- Physical property inspections that are handled by the Real Estate Assessment Center (REAC) will not be conducted, even if they were already scheduled.
- The Office of Community Planning and Development will continue to disburse block grant funds, but only in cases where failure to address the issues will result in a threat to safety of life and protection of property.
- The government’s Disaster Recovery Assistance programs that are funded through multi-year appropriations will continue operations.
- Businesses will no longer be able to access their E-Verify program that allows them to determine the eligibility of their employees or potential new hires.
- The Small Business Administration will not initiate any new loan guarantees during the shutdown.
- The Occupational Safety and Health Administration’s investigation and enforcement activities will cease during the shutdown, unless there is a threat of imminent danger.
- Home builders that are seeking permits from the Fish and Wildlife Service in regards to the Endangered Species Act and how their projects can impact those species will not be able to apply for new permits or receive approval on permits currently under review.
- Home builders that are applying to be a partner with the EnergyStar program will not receive approval during the shutdown.
The main point that the NAHB wants both home buyers and home builders to remember is that you should expect delays for any housing-related federal government programs that are still operating, and plan accordingly. To stay updated on any breaking news related to the government shutdown and how it will affect the housing industry, visit the NAHB’s website at www.NAHB.org.
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