What A Government Shutdown Means To Home Buyers And Sellers

What A Government Shutdown Means To Home Buyers And Sellers

Congress has failed to approve a Continuing Resolution (CR) providing funding for most government operations. Therefore, spending authority for most of the government expired at midnight on September 30, 2013. Until legislation providing for funding is signed into law, many offices and programs of the federal government are now shut down. This means many, but not all, government programs, including some that impact federal housing and mortgage programs, have been suspended or slowed due to the lapse in government funding. The Office of Management and Budget (OMB) requires each agency to have contingency plans in place. The information below is based on NAR staff review of agency contingency plans for the current shutdown and past experience with previous shutdowns and near-shutdowns.  

Federal Housing Administration 

***** HUD’s Contingency Plan states that FHA will endorse new loans in the Single Family Mortgage Loan Program, but it will not make new commitments in the Multi-family Program during the shut down. FHA will maintain operational activities including paying claims and collecting premiums. Management & Marketing (M&M) Contractors managing the REO portfolio can continue to operate. You can expect some delays with FHA processing. 

***** VA Loan Guaranty Program  

Lenders will continue to process and guaranty mortgages through the Loan Guaranty program in the event of a government shutdown. Expect some delays during the shutdown.  

***** Flood Insurance  

The Federal Emergency Management Agency (FEMA) confirmed that the National Flood Insurance Program (NFIP) will not be impacted by a government shutdown, since NFIP is funded by premiums and not tax dollars. Changes to the flood insurance program scheduled to take effect on October 1 will be implemented as scheduled.  

***** Rural Housing Programs for the U.S.

Department of Agriculture programs, essential personnel working during a shutdown do not include field office staff who typically issue conditional commitments, loan note guarantees, and modification approvals. Thus, lenders will not receive approvals during the shutdown. If the lender has already received a conditional commitment from the Rural Development office, then the lender may proceed to close those loans during the shutdown. A conditional commitment, which is good for 90 days, is given to a lender once a USDA Underwriter approves the loan. If a commitment was already issued, the funds were already set aside and the lender may close the loan at its leisure. If Rural Development has not issued a conditional commitment, the lender must wait until funding legislation is enacted before closing a loan. It is important to note that the traditional definition of “rural” for qualifying communities for assistance will be continued in effect during the shutdown. We expect that language to continue the current definition will be included in whatever funding measure is eventually enacted.  

***** Government Sponsored Enterprises 

Fannie Mae and Freddie Mac will continue operating normally, as will their regulator, the Federal Housing Finance Agency, since they are not reliant on appropriated funds.  

***** Treasury  

The Making Home Affordable program, including HAMP and HAFA, will not be affected as the program is funded through the Emergency Economic Stabilization Act which is mandatory spending not discretionary.  

Information provided by courtesy of the National Association of Realtors


Mark Bentz Headshot
Author:
Phone: 703-307-7305
Dated: October 1st 2013
Views: 3,944
About Mark: ...

Property Search








RSS Feed

View our latest blog posts in your RSS reader. Click here to access. RSS

Search Blog

Recent Blogs

Where The Jobs Are Best Places To Live 3 - 3. Falls Church, VA Towns include: F
Where The Jobs Are Best Places To Live 8 - 8. Prince William County, VA Towns i
Keeping You Updated On The Market May 5 2014 - MARKET RECAP Who to Believe on This
Keeping You Updated On The Market April 21 2014 - MARKET RECAP When Will We Pull Out o

Our Bloggers

Saved Properties

This is a list of your favorite properties. We will email you if a property is reduced or leaves the market.

Click 'Save' to add a property to this list.

Register / Login

New & returning visitors please enter your information to login.

Questions? Comments? Complaints?

This message will go directly to the head of our team.

Location & Address

Blu Skyy Realty
2712 Southern Blvd. Suite 201
Virginia Beach, Va
703-539-5482
757-340-6023

Other Locations