Yeah the shutdown is a big deal for a lot of people and their families, but the houseing market certinaly hasnt come to a screaching hault. I was headed into work today listening to the radio and all the news about the government shutdown. We all knew it was possible and by the end of the day yesterday pretty much inevitable. The congressmen being interview on the radio made it sound like the housing market was going to come to a screeching halt. Heck you would think that all the Realtors and Loan Officers were going to get a couple weeks off while Uncle Sam figured things out. Well I got some breaking news, we are all still here, still working away, & most importantly still closing loans! So what’s the real deal? What loan programs have been affected by the shutdown? Here’s the scoop:
- Conventional Loans: Unaffected – depending on income basically the IRS will not issue tax return transcripts (Form 4506 T). Typically these are ordered & reviewed prior to closing. Any loan that has other income (mainly self employeed borrowers) that would be reported on the tax returns will not be able to close until we have the tax transcripts. This includes borrowers trying to do 5 to 10 financed properties as those require IRS tax transcripts to deliver to Fannie Mae. So borrower who recive a w2 we can close no problem.
- VA Loans (veterans administration): Unaffected
- FHA Loans: Unaffected (at least for the foreseeable future, so basically if this thing drags out for months FHA could be affected but it’s not very likely)
- RD Loans: Affected – this ones kind of a big deal. Since everyone is still working except for the people at RD we can still get the file ready to close. However, we for we can close the loan RD needs to issue a conditional commitment and the final loan has to be run thru their system. Currently there is nobody there to review the file and the system (GUS) that we run the loans thru is offline. So plan for delays on all RD files. How long is unknown, but for loans here in Michigan if the file isn’t up at RD already it will be at least 30 days from whenever all those government employees go back to work.
So to recap we are still closing and funding all loans with the exception of those rural development loans.
If you want more info you can read the governments contingency plan here http://www.whitehouse.gov/omb/contingency-plans