Reverse Mortgages: What Happens in a Government Shutdown?

FHA & HECM Operations During a Federal Government Shutdown

When the U.S. government shuts down because Congress hasn’t approved funding, many HUD and FHA offices run with limited staff and services.  For the Home Equity Conversion Mortgage (HECM) program, here’s what matters:

What Stays Open

  • Loan Servicing & Payments — If you already have a HECM, your monthly draws and scheduled payments from HUD-held loans will continue.
  • Payoff Requests — You or your heirs can still request payoff statements or subordinations for Secretary-held HECM liens, though processing may take longer.
  • Claims & MIP Refunds — Lenders can still file insurance claims, and HUD will process monthly insurance premiums (MIP) and refunds; however, expect a slower turnaround.
  • Counseling Locator & FHA Resource Center — You can still search for HUD-approved housing counselors at hud.gov/counseling and use the FHA Resource Center (answers@hud.gov or 800-CALL-FHA).  Responses may take longer.

What Pauses

  • New HECM Endorsements — FHA will not endorse (insure) new reverse mortgages during the shutdown.  Lenders can accept applications and process files internally, but final insurance approval halts until the government reopens.
  • FHA Staff Intervention — Actions that require a human review (case corrections, manual approvals, certain condo project sign-offs) will be delayed.
  • Some Tech & Data Updates — Systems like Neighborhood Watch and HERMIT remain operational, but data may not be refreshed.

For Homeowners in Trouble

If you’re furloughed or facing payment difficulty on a forward FHA loan (not HECM), servicers are reminded to offer forbearance and repayment plans.  For HECM borrowers, your required obligations (property taxes, insurance, home upkeep) remain.  If you can’t pay taxes or insurance, call your servicer right away to discuss loss mitigation.

Bottom line:

  • Current HECM borrowers continue to receive payments and can request payoffs or lien releases; however, any matters requiring HUD staff assistance will progress at a slower pace.
  • New HECM loans can move forward to approval, but can’t be finally insured until the shutdown ends.
  • Help remains available at 800-CALL-FHA and HUD’s counselor search tool, expect longer wait times.


Frequently Asked Questions

Q.

Can I still get a reverse mortgage while the government is shut down?

You can start an application and work with your lender, but FHA will not endorse (insure) new Home Equity Conversion Mortgages (HECMs) until the shutdown ends.  That means your loan can proceed with counseling, appraisal, and underwriting, but can’t receive final FHA approval or insurance until funding is restored.
Q.

Will my existing reverse mortgage payments stop?

No.  If you already have a HECM, monthly draws and scheduled payments continue.  HUD will continue to send funds to borrowers with Secretary-held loans.
Q.

Can my heirs still pay off or sell my home if I pass away during a shutdown?

Yes.  Payoff statements and subordination requests are still being processed; however, wait times may be longer.  Heirs can still settle the loan or sell the property.

Q.

What if I need to call FHA or HUD?

The FHA Resource Center remains open but with fewer staff and slower responses:

Q.

What’s delayed or unavailable?

  • New HECM endorsements (FHA insurance on new loans)

  • Manual case corrections and certain condo approvals

  • Updates to FHA’s internal monitoring systems and some data tools



Customer Service

The following will be available for general inquiries during the shutdown, but with limited staff assistance available, longer wait times for assistance, and limited ability to answer case-specific questions:

  • The FHA Resource Center
  • The Resource Center’s online FAQ site will be available, but will not be updated for the duration of the shutdown
  • By email at answers@hud.gov
  • By phone at (800) 225-5342 and
  • The FHA National Servicing Center by phone at (877) 622-8525.

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