September 30, 2013
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On Friday, HUD released a Contingency Plan outlining what steps the agency will take in case of a government shutdown, which could occur as soon as tomorrow.  The plan outlines what services will continue to be available and which programs the agency will suspend.  Earlier today, NCSHA participated in a conference call HUD held to inform key stakeholders further about its plans.  Below is a summary of how key HUD programs will be affected. 
 
FHA Single-Family Insurance
 
FHA will continue to endorse new single-family loans during the shutdown, with limited HFA staff available to underwrite and approve new loans.  During the call, HUD clarified that it can continue to endorse new mortgages for as long as it has the funds to cover the endorsements.  The agency will also continue all operations connected to the maintenance and disposition of FHA’s real estate owned (REO) properties.
 
FHA Multifamily Programs
 
During the shutdown, FHA will continue to close on developments that have critical external deadlines orthat have firm commitments with scheduled closing dates during the shutdown period (including RAD projects).  During the first 10 business days of a shutdown, MAP lenders servicing construction loans may, at the risk of the lenders, owners, and general contractors, process interim construction loan draws.  HUD will perform or contract for construction inspections on a post-review basis when the government re-opens.
 
Ginnie Mae
 
Ginnie Mae will remain open during any shutdown.  Ginnie Mae will be able to continue perfuming almost all of its current functions, including issuing new commitments, issuing mortgage-backed securities, processing monthly payments, and paying securities.
 
Rental Assistance Programs
 
HUD will make payments under Section 8 contracts, Rent Supplement, Section 236, and PRACS where there is a permanent or indefinite authority or multi-year funding.  HUD also will renew or fund Section 8 contracts and PRACS where there is budget authority available from prior appropriations or recaptures.  During the briefing, HUD officials confirmed that Section 8 Housing Assistance Payments (HAP), contract renewals, and administrative fees for October 2013 will be paid on time, due to advanced appropriations allocated for this purpose.  Future HAP payments or contract renewals due in November or later will be contingent on Congress approving appropriations bills or a Continuing Resolution for Fiscal Year (FY) 2014.
 
The plan specifically states that HUD will pay Section 8 Performance-Based Contract Administrators (PBCAs) for work on properties with prior appropriations.  The Department will manage HUD-owned property and property where HUD is mortgagee-in-possession.  HUD also will approve emergency repairs.