The Baltimore field office of the Department of Housing and Urban Development (HUD) will soon be permanently closed, along with many other HUD field offices. The downtown Baltimore office, which employs about 90, is to be shut down. All who work there will likely be terminated by order of the U.S. Department of Government Efficiency. The closure is part of HUD's reduction of regional and field offices.
Eliminating the Baltimore office and transferring cases to other FHA offices will mean it will take longer to receive approvals and resolve issues between the loan originator and the agency. Boston or New York are already swamped with servicing the loans. HUD construction analysts, appraisers, underwriters, and, most importantly, asset management who know the market here are all going to be eliminated. It is going to make it much more difficult to finance and monitor housing.
The biggest impact will be a severe slowdown in processing Federal Housing Administration (FHA) loans for multi-family projects, one of the Baltimore office’s major functions. An observer commented, “It doesn’t make any sense to do this in the name of saving money. They finance anything from affordable- to market-rate projects, and they also asset manage them. They actually make money – billions – for the federal government that gets put back into the general fund.” Created by President Franklin Delano Roosevelt during the Great Depression under the authority of the National Housing Act of 1934, the FHA is one of the main government agencies that offers low down payment mortgages for qualifying homebuyers.
Other functions of the Baltimore office include Community Planning and Development (CPD), which administers local grants to promote better housing and expanded economic opportunities to low and moderate income persons, and enforcement of the Fair Housing Act, which prohibits discrimination in housing-related activities. Another loss from the shutdown of the field office will be oversight of Section 8 and voucher housing and local public housing authorities. Because this office administers the money to public housing authorities and keeps a watch over those funds, there will be more opportunity for fraud.
Responding after publication, the HUD Public Affairs Office said “no decisions have been finalized.”
