The Trump administration's push to dramatically downsize the Department of Housing and Urban Development could leave more than 30 states without local staff to underwrite mortgages.

Despite federal law requiring HUD to maintain an office in each state for mortgage insurance processing through its largest division, the Federal Housing Administration, field offices in 34 states face closure, Bloomberg reports.

States like Arizona, Michigan, Ohio and the District of Columbia would be left without a local HUD office.

HUD is responsible for national policy and programs that address affordable housing needs and enforce fair housing laws, currently providing affordable housing options to more than 4.3 million low-income families through its programs, according to its website.

As part of HUD's roles, its FHA division generates billions for the Treasury by underwriting mortgage insurance for thousands of buyers each year, Bloomberg reported. Closing offices raises concerns about HUD’s ability to back mortgages for apartment buildings and single-family homes.

Since 1992, federal law has required HUD to maintain at least one field office in every state to ensure proper processing of loan and mortgage insurance applications. To change that, the organization must seek approval from Congress, American Federation of Government Employees National Council 222 President Antonio Gaines told Bloomberg.

“Reports of reports are not accurate. No decisions have been finalized; however, the department is exploring consolidation while continuing to prioritize service,” a HUD spokesperson told Bisnow in a statement.

Another federal law stipulates that any changes to a HUD regional office can only move forward 90 days after the government releases a cost-benefit analysis of the closure, but no such analysis has been published since President Donald Trump took office, Bloomberg reported.

“This process is unprecedented, ignoring statutory requirements and contractual obligations each agency has signed with union partners,” Gaines told Bloomberg. “They’re refusing to adhere to any norm or process and it needs to be reined in.”

Under the plan, regional offices would remain open in Atlanta, Boston, Chicago, Denver, Philadelphia, Fort Worth, Texas; and Kansas City, Kansas. Field offices in Honolulu, Los Angeles, Anchorage, Alaska; Greensboro, North Carolina; Jacksonville, Florida; and San Juan, Puerto Rico, would also remain open.

The Trump administration's effort to cut down HUD’s office presence comes a month after the department — which employed 8,900 people full-time as of 2023 — announced plans to slash its headcount by 50%. The cuts are focusing on offices that enforce civil rights laws, data aggregation about the housing market and rebuilding communities after disasters.

While the FHA, which insured more than 498,000 first-time homebuyers in 2024, would be exempt from these cuts, the Trump administration proposed reducing more than 40% of the staff in HUD’s Office of Housing, including the FHA,  Bloomberg reported.

UPDATE, MARCH 7, 10 A.M. ET: This story has been updated to include a statement from HUD's spokesperson.