How Does the Government Shutdown Affect My Community Association?

Community Associations Institute recently published an article outlining how community associations are affected by the partial government shutdown. It is summarized below. Read the full article.

The partial government shutdown impacts several federal agencies and programs important to community associations. Homeowners and buyers, board members, community managers, attorneys, and other business partners may notice delays in condominium loan certification, flood insurance policy changes, drone licensing approvals, and more.

Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) 

More than 90 percent of HUD staff are furloughed, halting or slowing a number of HUD functions, including condominium project certification approvals and renewals. When the shutdown ends, a delay in processing may be expected due to a backlog.

If a condominium project is FHA-certified, lenders may continue processing condominium loan approvals. If a condominium project isn’t FHA-certified, lenders may continue processing condominium approvals under the direct endorsement lender review and approval process. However, due to limited staffing, processing and closing of FHA- mortgages may be delayed. Such delays will increase as the shutdown continues.

FHA operations relate to foreclosure, foreclosure prevention, and HUD-owned property sales will continue as normal. Maintenance and security activities at HUD-owned properties will also continue as normal during a shutdown.

In addition:

• FHA reverse mortgages aren’t being processed.
• The final HUD condominium rule and guidance on assistance animals’ policies will be delayed.
• The HUD website will not be updated.

Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP) 

Some of the FEMA staff is furloughed, and a number of FEMA functions have either halted or are slowed. The shutdown does not impact FEMA’s response to presidentially declared disasters. While FEMA initially stated it would not write new NFIP policies and renewals, they have amended that position. Further, NFIP is extended through May 2019. Policy consideration and movement will be delayed.

Federal Communications Commission (FCC)

Some of the FCC staff is furloughed, and several FCC functions have either halted or are slowed. The shutdown is halting the processing of new and renewal licensing applications, including drones. Policy consideration and movement also will be delayed.