Industry group applauded shutdown deal but warned of recurring risks to key loan programs
The Community Home Lenders of America (CHLA) welcomed the Senate’s progress toward ending the protracted government shutdown, but called on lawmakers to address persistent vulnerabilities in federal mortgage programs exposed by the crisis.
“Progress towards ending the federal government shutdown is welcome and should help normalize the operations of various federal mortgage programs,” Scott Olson, executive director for CHLA, said.
“At the same time, this will likely not be the last federal government shutdown. So CHLA calls on Congress and federal agencies to work together to correct budgetary anomalies that have shuttered execution of certain new loans during shutdowns—such as Rural Housing Service mortgage loans and FHA Reverse Mortgage (HECM) loans—even as other programs like FHA forward loans are generally not affected.”
The Senate advanced a bipartisan agreement to fund the government through January, with a final vote expected this week. The deal, which includes a “minibus” of full-year appropriations for select agencies and a continuing resolution for the rest, is expected to restore normal operations across federal agencies once passed by the House and signed into law.
Shutdowns disrupt mortgage processing
The recent shutdown, which lasted over a month, forced some federal mortgage programs to halt new loan processing.
While FHA forward loans continued, programs such as the Rural Housing Service and FHA’s HECM reverse mortgages were effectively frozen, leaving borrowers and lenders in limbo.
“CHLA appreciates this action—and is calling on Congress and federal agencies like RHS to work together so that all federal mortgage loan programs can uniformly operate during government shutdowns to process new loans,” Olson said.
Impact on housing and the economy
The shutdown’s effects rippled beyond mortgage programs. Federal employees faced missed paychecks, and delays mounted at airports and other government services.
Lawmakers on both sides acknowledged the “truly precarious situation” for workers and the broader economy, with Senate majority leader John Thune noting the urgency to end the impasse.
Industry voices have repeatedly warned that recurring shutdowns undermine confidence in government-backed lending and disrupt access to affordable housing, issues that remain unresolved despite the imminent reopening.
As Congress moves to end the shutdown, mortgage industry leaders are urging policymakers to ensure that all federal loan programs remain operational in future funding standoffs, protecting both borrowers and the broader housing market from unnecessary disruption.
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