The U.S. Department of Housing and Urban Development (HUD) is preparing to close dozens of field offices nationwide, a move that could significantly impact mortgage underwriting, fair housing enforcement, and local housing assistance programs. According to department staff and federal employee unions, the closures would leave the majority of U.S. states without local HUD representation, raising concerns over potential violations of federal law.

What This Means for Homebuyers and Housing Programs

HUD field offices play a crucial role in processing mortgage insurance applications, enforcing fair housing regulations, and providing assistance to landlords, tenants, and local governments. Federal law mandates that at least one HUD office remains operational in every state to ensure proper mortgage insurance processing. Additionally, any restructuring of regional or field offices must be preceded by a cost-benefit analysis published in the Federal Register at least 90 days before any closures take effect. However, no such report has been made publicly available since President Donald Trump took office.

Which Offices Will Remain Open?

While many field offices face closure, the administration plans to keep open HUD’s regional offices in:

• Atlanta

• Boston

• Chicago

• Denver

• Fort Worth

• Philadelphia

• Kansas City, Kansas

If the plan proceeds, 34 states and Washington, D.C. would be left without a local HUD presence, potentially slowing down housing assistance and fair housing claims.

The Impact on FHA Mortgage Insurance

The Federal Housing Administration (FHA), a division of HUD, plays a vital role in the homebuying process by underwriting mortgage insurance for hundreds of thousands of buyers each year. These transactions generate billions of dollars annually for the U.S. Treasury. Eliminating local HUD offices could lead to delays in mortgage approvals and reduce support for homebuyers relying on FHA-backed loans.

What’s Next?

The proposed office closures have raised concerns among housing advocates, real estate professionals, and local governments, who argue that reducing HUD’s local presence could make it harder for communities to access essential housing resources. As the situation develops, industry leaders and policymakers will continue to monitor the potential effects on the housing market.

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Source: CityLab (March 5, 2025)