As you probably know, the U.S. government officially shut down a few days ago. This post is not a comment on the political aspects of the shutdown, but on the practical effects for the real estate industry. As a buyer or seller, you may be wondering how this impacts your ability to obtain and close mortgage financing. A short-term shutdown should have limited effects.
1) The Federal Housing Administration (FHA) will be able to endorse single-family loans during the shutdown; however, only a limited number of FHA staff will be available to underwrite and approve new loans so the process may take longer.
2) There will be no significant effect to Ginnie Mae, Fannie Mae or Freddie Mac.
3) The Department of Veterans Affairs (VA) will continue to operate, which means lenders will be able to continue originating VA-guaranteed loans.
4) The U.S. Agriculture Department (USDA) will cease all but essential functions and no new loans or guarantees through Rural Development will be made.
5) Lenders may not be able to continue to verify social security numbers through the Social Security Administration.
6) The Internal Revenue Service (IRS) will not process any forms, including tax return transcripts. Without tax transcripts, loan processing may be delayed, depending on individual housing agency requirements and aggregator guidelines.
7) Mapping issues or amendments through FEMA will be impacted.