Government shutdown could make it harder for home buyers to get a mortgage
The ongoing partial government shutdown is having a far reaching impact across a number of different industries and real estate is one of them.
The shutdown is impacting home buying and lending in some cases and, in Raleigh, which is one of the hottest housing markets according to real estate websites like Zillow, the impact is worth noticing.
To prevent the home buying process from becoming a nightmare, Coldwell Banker HPW realtor Jennifer Coleman said now is the time to start thinking about how the partial government shutdown might impact that decision.
“The thing that we typically do just to stay ahead of it is we stay in communication with our lenders so we know ahead of time what the problems might be so we can walk our buyers through it step-by-step,” she said.
The situation is not bleak now, but it’s worth noting where buyers could face problems.
“Especially when it comes to USDA loans, specifically they would be the ones that would potentially not be able to be underwritten at all. Even longer term we could see some slowdown with FHA loans,” Coleman said.
The U.S. Department of Agriculture will not issue new direct or guaranteed loans during the shutdown, and Federal Housing Administration loans could be delayed because of staff shortages.
When it comes to the IRS, lenders may encounter problems verifying a borrower’s income if tax transcripts can’t be verified.
“Talk to you lender ahead of time. Talk to your realtor ahead of time. We’re here to walk you through the whole step-by-step process and catch the kinks before they happen,” Coleman said.
Fannie Mae and Freddie Mac generally won’t be impacted by the shutdown when it comes to processing loans.