The Government Shutdown and Your Mortgage Application

Here’s what you can do as a future homebuyer as the federal government recovers from its recent shutdown.

Current news for home-loan applicants

According to Alan Rosenbaum, CEO and founder of Guardhill Financial in New York City, “Shutdown-related issues [caused] delays of up to two weeks on typical loans.”

As of January 28th, the Federal Housing Administration and the Department of Agriculture are temporarily reopened. However, unless congress reaches an agreement by February 15th, funding for this reopening will run out.

For this reason, home-loan applicants should prepare for another possible shutdown. Below are a few ways you can do just that.

If you are looking for a USDA or FHA loan

According to The Mortgage Reports, “If you have a USDA loan in process, check IMMEDIATELY with your lender. Some will [still] be able to complete your loan, depending on the program and lender policy. Others may cancel your mortgage entirely.”

Some FHA loans have also been affected. Therefore, if you are currently waiting on an application status regarding an FHA loan it would be wise to check with your lender to see how things are moving along.

Due to the next possible shutdown, loans such as Fannie Mae and HomeReady may be your best option if you recently were unable to successfully apply for a USDA or FHA loan.

If you are looking for a conventional loan

Most loans are considered conventional (not government funded). However, a number of conventional loans are aided by the federal government in some way. During the shutdown, things did not run as smoothly for most conventional loans due to the government’s hand in providing information for underwriting.

Nonetheless, conventional loans were more stable than USDA and FHA loans during the government shutdown, and are likely the best option for most home-loan applicants at this time.

 

Has your home buying experience been affected by the recent government shutdown? Find the answers to your most urgent home-buying questions today by contacting one of our friendly and knowledgeable staff!