I have been receiving emails from many lenders over the past couple of days regarding the government shutdown. Although there was an agreement reached to keep the government open until February 8th, this could all start again if congress cannot come to terms on the budget.
So, how does the government shutdown effect the housing market? Another shutdown could impact buyers/borrowers getting a loan to purchase a home.
Below is some information provided to me from Janey Cope, a lender with Suntrust Mortgage, in Asheville.
“The largest areas of impact are related to the inability to process 4506T’s for Tax Transcripts when required OR to obtain the final Verbal Verification of Employment (VVOE) for government employees that are impacted.
Agency/Conventional, Portfolio, VA Loans: Alternative processes have been identified to include completion of an Affidavit of Employment prior to closing combined with obtaining the outstanding transcripts and VVOE post-closing in order to prevent closing delays.
Please note: Tax Transcripts are not required for as part of the process for VA loans or Conventional Loans
FHA: Alternative documentation may be leveraged in lieu of processing the 4506T for most clients. Final VVOEs are required prior to closing; therefore if an VVOE cannot be obtained for government employees / contractors, impacted borrowers may need to be contacted to have their closing rescheduled.
USDA Rural Development: USDA operations will be closed during the shutdown; therefore impacted clients may need to be contacted to have their closings rescheduled.
Is the subject property in a Flood Zone?:
The National Flood Insurance Program (NFIP)
- At this time, the NFIP has not been reauthorized and the program is not able to issue new or revised flood policies.
- If the client is not able to secure private flood insurance, the loan will not be eligible for closing.”
If you are in the process of buying a home, the recent 3 day shutdown could slow your process and your closing may need to be extended by a few days. However, if you are looking for a home and using an FHA or USDA mortgage, or purchasing a home in a flood area, the another government shutdown on February 8th could seriously impact your closing date. Let’s hope congress can reach a resolution and continue to allow home buyers to pursue the American Dream of Home Ownership.
Thanks for visiting our blog,
Bonnie Gilbert, Broker/REALTOR