Government Shutdown- What Does This Mean for Real Estate?
It's hard to believe this is actually a thing, but yes, the National Government is closed. Everyone has a different opinion on why, so I am not going to get into that.
I will say they've got things a little backwards. They should be making sure that our troops and their families are getting paid, not Congress... But what do I know? I am just a Realtor. Here's hoping they get this all figured out by February 1st.
But- back to the topic I am supposed to be talking about....
How is this government shutdown going to affect buyers and sellers?
The IRS- During a real estate transaction, tax returns and tax certificates are needed. The employees who are still lucky enough to be working will have a million other essential obligations they are trying to tackle, and processing mortgage documents will not likely be near the top of the list. That would mean that a transaction would essentially need to be put on hold until the documents can be obtained. More about that here.
VA Loans- Luckily they fixed the problem here in the 90's. Your lender can continue on as usual. Order those appraisal, certificates of eligibility, and submit for the VA funding fee. Again- if they don't have those necessary tax records, they could still be delayed. At least we've got this covered! Go America! More here.
FHA Loan- The Federal Housing Authority will still be able to endorse loans during the shutdown, but they will have a very limited staff. This could cause delays. The longer the shutdown, the worse it will get. They also won't be able to underwrite and approve loans. That means if you haven't gotten final approval, you will have to wait till the shutdown ends before you can close on your home. More on that here.
USDA Loan- No additional loans will be be issued during the shutdown, and if they are not approved before the shutdown, they won't be funded until after the shutdown ends. This basically means that if you planned on going USDA you just have to wait. You can see more information here.
The National Flood Insurance Program won't be able to issue flood insurance, Social Security numbers won't be able to be verified, and overall because of the shortage in staff in all of these programs, you'll need more time to close.
Obviously, that doesn't mean it's not possible. The housing market will continue even without approvals, and as soon as everything comes back online- we will continue business as usual!
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