In light of the partial government shutdown, many people have been approaching me with questions about the impact this has had on our market.
To answer one of the most common questions I hear on this subject: Yes, the FHA program is still (basically) fully functional, with the exception of loans for multi-unit properties. The portion of the program responsible for multi-unit properties is currently inactive and will remain so until the federal government is up and running.
Moving on, what about USDA loans? For those who may not know, the USDA loan program provides zero-down financing for buyers purchasing property in qualifying rural areas. Unfortunately, underwriting on these loans has been put on hold. Anyone seeking this type of loan product, including those in the middle of a transaction, will need to wait until the shutdown is over before they’re able to proceed.
“Anyone seeking to use a USDA loan, including those in the middle of a transaction, will need to wait until the shutdown is over before they’re able to proceed.”
Self-employed borrowers are another type of buyer being affected by this shutdown. You see, most lenders today require IRS verification transcripts (Form 4506-T) to be completed before self-employed borrowers can receive financing. And given that these forms are not being processed during the shutdown, self-employed borrowers should expect delays.
The final point I’d like to share today is the shutdown’s impact on properties that require flood insurance. While FEMA was not issuing flood insurance earlier in the shutdown, this service has now been resumed. Even so, buyers purchasing a property of this type should still expect slight delays.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.