Less than a week after a task force was launched to “eliminate waste, fraud and abuse” on the skin, it seems that almost half of the Federal Housing Administration (FHA) is set to be dismissed.
The shock development was reported by Bloomberg, based on “two sources” familiar with the plan.
Just last Thursday, Skin Secretary Scott Turner plans to trim the agency down and claimed to identify over $ 260 million in savings, and more in the future.
And like other government departments that are recently affected by redundancies, Doge seems to be moving very quickly and aggressively.
The big question is how the redundancies can affect the agency and if they will be itched back if disturbances occur.
FHA Developments are the latest shock to the system
In just under a month, there have been countless government breaks across many departments, including the Department of Energy, Department of Education, EPA, IRS, CDC and many others.
Another 75,000 government employees have accepted volunteer buyouts as well as the Department of Government Efficiency (DOGE) seeks to cut down on expenses.
It seems that no part of the government is sparing, and the latest cuts have rattled the agencies playing an important role in the housing market.
Although it is unclear how many employees will be affected, the FHA’s parent, the US Ministry of Housing and Urban Development, or Skin too short, employs approx. 9,600 employees according to its own site.
Last week, DOGE said half of the skin work strength was removed. But at that time, FHA employees were not affected by the news.
It seems that things have changed and now almost half of FHA is removed as well.
In the field of skin, there are many departments, including FHA and Ginnie Mae, the latter that provide guarantees on mortgage -supported securities (MBS) issued by FHA, VA and USDA.
FHA loans play a huge role in the mortgage market
After complying with loans supported by Fannie Mae and Freddie Mac, FHA loans are the most common type of priority loan available to home buyers today.
And they are especially important for minority buyers, including black and Latino loans, per. Urban Institute.
So to say that this is a very big deal would be a huge understatement. One silver lining, if you could even call it, is that loan volume has been very low recently compared to recent years.
This means that disturbances can be less of a problem, as the staff left has fewer loans to process than in recent years.
After all, with the mortgage rates now closer to 7% than 3%, far fewer borrowers refinance their priority loans.
And home purchases are also marked down, with only about four million home sales last year in the middle of worsening affordable prices.
But if criminal things become a bigger problem in the coming years, there may be increased pressure on FHA, especially if it is short -determined.
Can I still get a FHA loan?
The short answer is yesYou can. While the redundancies appear to be significant, I doubt that DOGE would do something to bring your ability to get a FHA loan.
As noted, the very common types of priority loans used by millions to buy a home, partly thanks to their low requirements for payment of 3.5% and liberal credit scores.
While FHA is a government agency, FHA loans are issued by individual banks and mortgages.
Much of the process is carried out by employees in the private sector as loan managers and mortgage brokers who are not employed by the government.
In other words, the federal government does not issue FHA loans, it simply sets the insurance court lines and insures them when financing.
Ideally, this means that you must continue to be able to apply for a FHA loan and close the loan without any problems.
If you are currently getting an FHA loan, the same basic reason applies. Your loan will more than likely continue to move forward as expected.
However, given the severity of these redundancies, it is not a bad idea to predict longer treatment of timelines and plan accordingly.
This can affect a mortgage lock if funding takes longer than expected or if there are other unexpected snags.
Be sure to communicate with your loan manager or mortgage broker to get updates about FHA’s system status.
Read on: FHA vs. conventional loans.
Before creating this site, I worked as a banking director of a wholesale loan in Los Angeles. My practical experience in the early 2000s inspired me to start writing about mortgage loans 19 years ago to help potential (and existing) home buyers better navigate the home loan process. Follow me on x for hot take.
