The real estate industry is not immune from President Barack Obama’s official enactment of a sequester deal that launches $85 billion in automatic spending cuts across the board.
Prior to the sequester, the Department of Housing and Urban Development described how the cuts could curtail funding for housing aid for low-income families, but as of Monday, the housing and mortgage finance industries are still trying to get their hands around what the cuts will eventually do to budgets and federal housing programs.
Two representatives for the National Association of Realtors said in a web posting the Federal Housing Administration acknowledged “furlough days could impact endorsement/claim timeframes for FHA loans.” However, NAR wrote, “the underlying insurance funds, funded by premiums, will not be affected by the sequester and FHA loans will be supported.”
In addition, NAR said furloughs at the Department of Agriculture could slow down the final processing of rural housing service loans, but all VA programs are exempt, the Realtors said.
Automatic government spending also could result in 75,000 fewer households receiving foreclosure prevention aid and counseling services, HUD said more than a week ago. The department is expected to provide more information on the direct impact this week.
Another 125,000 individuals or families could lose assistance offered through the Housing Choice Voucher program, putting more people at risk of becoming homeless, HUD noted in earlier reports to Congress. The HCV program currently provides support to families who are renting in private apartment units.
HUD also warned that sequestration cuts could cause more than 100,000 formerly homeless Americans, including veterans, to be removed from their current residences or emergency housing programs.