Monday, October 14, 2013
Due To Government Shutdown, No Low Income Housing Vouchers Are Being Issued
A government shutdown occurs when both Republicans and Democrats cannot agree on a fiscal budget. Why is this significant? Because passing bills that fund government programs represents the primary function of Congress. When they stop doing this, programs and people are directly affected. This happened on Tuesday, October 8, 2013.
Affect on Low Income Housing
The U.S. Department of Housing and Urban Development (HUD) is a federal program; it is now shut down. What does this mean? Housing vouchers for federally-subsidized, low-income housing will not be issued. Getting federal funds to finance affordable housing will not happen. So, many poor people who were depending on government help to find affordable housing will have to wait even longer.
Affect on Home Buying
Many low- and medium-income families who have saved to purchase a home may have to wait. An FHA insured loan is a US Federal Housing Administration mortgage insurance backed mortgage loan that provides federal assistance to low-income Americans by requiring much lower down payments, about 3.5 percent compared to the 20 percent for a conventional loan. And they can have less than perfect credit. This program will be affected until the shutdown ends.
The affect on housing is devastating in an already bad situation where there is simply not enough affordable housing for all the people who need it. Economists, housing authorities, and American families are wondering how much more damage will be done to the housing industry, and how they will survive.