Government Shutdown will impact Home Buyers and Home Sellers
The Federal government has reached shutdown status. It will impact the processing and closing of mortgages, depending on where a loan is in the process and what type of loan it is. Here’s how you may be impacted as a home buyer or home seller:
Open in Spite of the Government Shutdown
FNMA & Freddie Mac should not be directly impacted.
FHA & VA will continue most operations as long as the shutdown is brief.
- VA will continue to operate.
- Limited FHA staff will be available to respond to questions, emails or other correspondence
- Lenders will be able to obtain an FHA case number from the FHA Connection
- FHA appraisals can be ordered if you have a case number
- FHA will endorse single family loans; however, it may take a little longer to endorse.
- Lenders with Lender Insurance (LI) approval can continue to insure loans as long as FHA does not run out of commitment authority.
- FHA will not approve condo projects
- FHA will not underwrite or approve loans submitted directly to them
The following government offices/services will not be open/available:
Closed During Government Shutdown
- USDA(United States Department of Agriculture) will not issue any new commitments
- USDA will not issue the Loan Note Guarantee (LNG)
- GUS will not be operational (this is the automated undewriting system for USDA loans)
- IRS will not process any forms including 4506T requests. This could affect all types of loans.
- SSA will not process any SSA-89 requests. This could affect all types of loans.
- Government websites may not be updated
The bottom line is that if a loan is far enough into the process then it may be perfectly fine. However, if there are items still needed that are obtained from a government agency, like tax transcripts or a USDA commitment, then it may not be possible to close on those loans until the government is open again for business.
What this means to Home Buyers:
Buyers will not have access to some of the programs normally available to them. Buyers should consult their lender to see how this impacts them.
What this means to home Sellers:
If you are currently under contract, you may want to discuss this with your agent to see how this may impact your sale. If you are considering offers, this adds another variable you need to consider.