Ministry of Housing and Urban Development
Source: Ministry of Housing and Urban Development
Thousands of of Federal Workers unemployment In recent weeks, the Trump administration has tried to cut government spending.
Antonio Gaines, president of the National Committee of the United Government Employees’ Federation of National Employees, said FHD employees could be one of the next targets.
It is unclear which types of workers are at risk of losing their jobs within the agency FHA under the HUD-led leadership.
“It won’t be close to the 40% to 50% range that other areas of planning are going through, but there will be some cuts,” Gaines told CNBC.
Secretary of Hudder Scott Turner emission In February, the Task Force of Government Agency reviewed the HUD’s budget and looked for ways to cut spending.
Bloomberg Report Potentially 40% cuts to the agency’s staff. HUD did not return a request for comment from CNBC, but HUD officials told Bloomberg that 40% of the figures were “inaccurate”.
The White House did not respond to a request for comment.
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FHA is one of the major government agencies for FHA loan eligible home buyers to provide low down payment mortgages for qualified borrowers, including first-time home buyers, low- and middle-income buyers and buyers from minority groups.
According to Redfin, about 15% of mortgage-backed home sales used FHA loans in December, while Redfin’s data is about 10%. Rise may be a sign of competition in the housing market recent Tell CNBC.
Experts say that’s what potential employee cuts FHA means for U.S. home buyers.
FHA staff will affect the reduction of workforce for home buyers
Melissa Cohn, regional vice president of William Raveis Mortgage, said that while whether FHA staff cuts the implementation, and to what extent, any layoffs should not affect the borrower’s ability to obtain FHA loans. But they may slow down the process.
“In the same period, fewer loans will be approved because fewer people are working on these loans,” she said.
“I can imagine these cuts could lead to delays at all stages,” said Ingrid Gould Ellen, professor of urban policy and planning and director of housing and urban policy at NYU.
She said this could mean the time it will take to get approval after the loan is over or resolve any issues between the lender and the FHA.
“These delays will eventually lead to higher costs on mortgages, as it will take more time to close the loan and lock in interest rates,” Gould Ellen said.
Richard Green, director and chairman of the UC Real Estate Center, said FHA staff typically use model plans to determine whether they have obtained loan approval for borrowers.
In some cases, the system will consider the applicant as an “exception” or an individual who needs manual coverage. This could be a “labor-intensive process,” he said.
“For those who get loans through manual underwriting, I think it will take longer,” Green said.
With the small number of FHA staff members, third-party loan officials responsible for handling FHA loans may charge higher fees to compensate for the increased labor force, he said.
“People’s time is valuable. If you tell loan officials they’re going to have to spend more time on FHA loans, that’s going to be a cost.”
Higher fees may absorb how much the buyer can put down. This will eventually further burden individuals who are underpaying for a low payment mortgage because they do not have enough savings to completely cover upfront expenses.
Currently “as usual”
“So now, this is business as usual,” she said.
But remember that any staff cuts can affect how long it takes to get an FHA loan: “Buyers who want to buy today will have to spend more time to complete the deal.”
She said slower processing times may make your offer less competitive, especially if your sales in the market are usually closed in a shorter time.
For example, if you shop in a place that usually takes 30 days to complete a deal, the “seller may not be willing to wait” to complete the FHA deal to complete.
So if you are a first-time home buyer in the market, you may benefit when looking for mortgage financing. Experts say looking at down payment assistance programs at the state or local level can help you put down more and expand your loan options.
