What the Government Shutdown Means for You

Published: 01/23/2019

We have fielded many questions regarding the government shutdown and upcoming submission process. Here is a general summary of what you may expect:

  • You will not be able to reach anyone at HUD via email or phone.
  • We will not know until the shutdown ends whether there will be an extension to the financial statement submission deadline.  The biggest reason TO NOT expect an extension is that the REAC FASSUB is still online and accessible.  They are maintained by private contractors offsite of HUD offices and are not affected by the shutdown.
  • Subsidies for projects with current HAP contracts will continue.  However, projects with expiring HAP contracts may experience the stoppage of HAP payments.
  • There are over 1,700 HAP contracts expiring in the period from December 2018 through February 2019.  If your client is on the list, you could have significant disclosures related to the ability for the project to survive 1-3 months of missing subsidy payments.  The list of the expiring contracts is contained in a spreadsheet available to download on the AHACPA website.

HUD has provided specific program shutdown questions and answers.  A summary of Multifamily, PHA, and FHA-Lender Questions and Answers is below.  The full document can be downloaded here.


MULTIFAMILY

Q: Will HUD make payments under Section 8 contracts, rent supplement, section 236, or PRACS where there is a permanent or indefinite authority or multi-year funding?

A: For Section 236’s, interest reduction payments will continue and Rent Supplement payments from prior year funding and recaptures will continue. The Department will make payments under Section 8 and Project Rental Assistance Contracts where there is a permanent or indefinite authority or multi-year funding, or where there is budget authority available from prior year appropriations or recaptures. This includes processing Section 8 and PRAC renewals for expiring contracts and processing amendment funds for nonexpiring Section 8 contract renewals.

Q: Will the Financial Assessment Sub-System (FASS) accept audited financial statements?

A: Financial statements may be submitted through FASS; however, if problems are experienced with a submission, the REAC Technical Assistance Center (TAC) will not be available to provide assistance. AHACPA Comment – We speculate that REAC will ask users to request an extension on a case by case basis. Check out our Submission Due Date Calculator for more information on deadlines, grace periods, and late notices.

Q: Will HUD entertain requests for waivers or undertake other activities as part of routine asset management?

A: For the most part, no. However, for those properties which have received designations by HUD as troubled assets through its rating of insured and assisted assets, minimal staff will be available to provide necessary oversight to ensure that actions can be taken to resolve imminent threats of claim or abatement.


PUBLIC HOUSING

Q: Will someone with the REAC Technical Assistance Center (TAC) be available to take calls, answer questions, and provide customer service?

A: No. The TAC will not be operational. Assistance will be provided when the government reopens.

Q: Will PHAS scores be released?

A: No, PHAS scores will not be released until after the government reopens.

Q: Will PHAS appeals be accepted and reviewed?

A: You should still submit your appeal on time in accordance with regulation; however appeals will not be reviewed and you will not receive a response until after the government reopens.

Q: Will I be able to utilize HUD secure systems (including VMS, PIC, and FASS) to make submissions on behalf of my organization during the shutdown period?

A: Yes. HUD secure systems will remain available; however, there will be no contractor or HUD-staff support for system-related issues, submission questions or approvals, etc. during a government closure.

Q: Can PHAs submit their financial information during a government shutdown?

A: Since the financial system will still be operational during the shutdown, PHAs will still be able to submit their financial information; however no one will be available to review the submission until the government reopens.

Q: Will Public Housing financial late presumptive failures (LPF) be levied for PHAs that fail to submit timely?

A: No. LPFs will not be levied for late submissions during a government shutdown; however, any PHA that is due to submit, but does not submit by the due date must submit immediately after the government reopens.


FHA LENDING

Q: Will lenders be able to submit audited financial statements to the LEAP?

A: Yes. LEAP will be available during a government shutdown. However, FHA will be unable to review or process any audited financial statements.

Q: Are lenders required to file monthly default reports to FHA?

A: Yes. FHA’s system for collecting the monthly default reporting will be available if there is a government shutdown.

Q: Can lenders submit applications for FHA approval?

A: FHA will not approve any lender applications during the government shutdown.

Q: Will borrowers receive HECM payments from HUD during a government shutdown?

A: Yes. Borrowers will receive HECM payments.

Q: Will FHA monitor lenders during the government shutdown?

A: No. FHA will not perform any post technical endorsement or Quality Assurance Reviews during a government shutdown.

Q: Will lenders be able to get password resets for FHA Connection?

A: Lenders will be able to continue to utilize the automated password reset options on FHA Connection, but resets that require FHA employee direct assistance will not be available. AHACPA Comment – this may be a cause for an extension.

Q: Will lenders be able to submit audited financial statements to the LEAP?

A: Yes. LEAP will be available during a government shutdown. However, FHA will be unable to review or process any audited financial statements.

  • The information contained on this site is designed to provide accurate information in regard to the subject matter covered. However, this site is not a substitute for the promulgated standards or regulatory guidance. The information is provided with the understanding that AHACPA is not engaged in rendering legal, accounting, or other professional advice. If such advice is required, the services of a competent professional should be secured.