A Government Shutdown impacts the home loan process in a few ways. While a Shutdown’s impact on the lending process is small, closing your home loan could be delayed. As the 2018 Shutdown traipses into 2019 it touches the home loan process as follows.
Areas of Loan Process Impacted by Government Shutdown
1. BOND LOANS (AKA – Down Payment Assistance Loans)
Some but not all Down Payment Assistance Loans are on hold during the Shutdown. Please inquire for specifics.
Required transcripts not available from the IRS. However, home loans often close without transcripts pending special approval.
Temporarily unable to issue new commitments and also unable to guarantee (or insure) new USDA Loans.
4. SECTION 184 LOANS
Temporarily unable to fund/close Section 184 Loans.
Areas of Loan Process NOT Impacted by Government Shutdown
1. FANNIE MAE & FREDDIE MAC
Neither entity directly impacted by the Shutdown.
Not directly impacted by the Shutdown.
Barely impacted by the Shutdown. The only area impacted is the FHA Condo approval process known as “HRAP”
4. FLOOD INSURANCE
FEMA has decided to resume issuing New Flood Insurance Policies (prior to this change on 12/29 New Flood Insurance Policies were NOT being issued during the Shutdown) are not being issued by the NFIP.
Your Home Loan and the Government Shutdown
Countless different loan scenarios exist. From loan type and down payment to varying income sources used for qualifying. Each loan scenario is as unique as you are. A Government Shutdown could impact you based on the individual needs for your loan. For example, while Fannie Mae is not directly impacted, a report required to close a Conventional loan with Fannie Mae could be.
In other words, Fannie Mae, Freddie Mac, VA and FHA do not process tax transcripts themselves as that is a function of the IRS. While many home loans close without transcripts (based on an exception) a Shutdown related delay could impact any loan type.
In conclusion, while in general Government Shutdowns do not impact most home loans check with your lender to be certain.
By Jeremy House