Realtors, mortgage industry await impact of sequester

President Obama has signed an order enacting sequester that will result in $85 billion of spending cuts. The Department of Housing and Urban Development (HUD) believes these funding cuts will reduce housing aid for low income families. Federal housing programs may be cut as a result.

Federal Housing Administration (FHA) representatives indicated that FHA loan endorsement times could be affected by furlough days. Representatives from the National Association of Realtors (NAR) emphasized that sequester would have no effect on underlying insurance funds financed by premiums and also that FHA loans will continue to be supported.

NAR indicated that furloughs at the Department of Agriculture might decrease the rate at which rural housing service loans are processed. Another effect of sequester could be a significant reduction in those receiving HUD foreclosure counseling. Estimates are that as many as 75,000 individuals may be affected.

One critical program at risk is the Housing Choice Voucher Program. Cuts to this program’s support could affect 125,000 who are at risk of becoming homeless. HUD is concerned that over 100,000 Americans who were formerly homeless will be evicted from homes currently funded by emergency programs.

Contact Avis Lending to find out how your plans for obtaining a mortgage may be affected by sequester.

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