As the Federal Government shutdown drags on, several financing programs that utilize Federal Government insurance have been adversely impacted.
FHA Multifamily Lending
The U.S. Department of Housing and Urban Development issued a memorandum to FHA Multifamily Lenders on January 4, 2019 summarizing the impact of the partial government shutdown on the Multifamily FHA Mortgage Insurance Applications and Production Activities:
During the first 30 business days of the shutdown:
- FHA Multifamily closings for Initial Endorsement
- Closings will continue for projects with Firm Commitments issued on or prior to December 21, 2018 and which received a scheduled closing date from HUD occurring during the shutdown period.
- FHA Multifamily closing for Final Endorsement
- Closings will continue for projects with critical external deadlines.
- The Regional Production Division Director should be contacted to confirm scheduled closing dates.
- Servicing of Construction Loans and Non-Critical Repair Escrows
- MAP Lenders may, at the Owner’s and General Contractor’s risk, process interim construction draws.
- HUD will perform or review construction inspections on a post-review basis at the time the government re-opens.
- No change-orders will be processed or approved.
- No applications for Multifamily FHA mortgage insurance will be accepted or processed.
If your project is impacted by the government shutdown, you should work closely with your MAP Lender to understand your options. The attorneys at Hirschler are ready to assist borrowers as they navigate these unprecedented circumstances.
SBA lending also has been impacted by the partial government shutdown. Lenders that are processing new SBA loan requests will not be able to close these loans without SBA approval. Unfortunately, we understand that the SBA is not reviewing new loan requests. In addition, as their offices are presently closed, the SBA is not providing loan authorization numbers for loans that have already been reviewed and approved by SBA preferred partner lenders, and therefore those lenders are unable to close SBA-insured loans at this time.
Kristen M. Chatterton