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How would a government shutdown impact the home buying process or homeownership?

9/29/2023

There is a lot of information circulating about how a government shutdown may affect current mortgages (for federal employees) or the loan process for those in the process of buying a new home, or refinancing a current home. Below are some brief bullet points on how this can affect current or future mortgages, but the best advice is to speak with a loan expert as soon as possible. If you need a recommendation, please let me know. I'd love to help.

If you are a federal employee, and a homeowner with a mortgage, contact your loan servicer as soon as possible if you think you’ll have trouble paying your mortgage. There may be assistance (IE: a pause in your mortgage payments where late payments are waived). The sooner you can speak with your servicer, the better.
If you are applying for a new mortgage, you likely won’t have a problem. If the shutdown is extensive, that could certainly change. The best information will come from a loan expert (which I am happy to provide recommendations for). FHA and VA loans should continue to be processed (as of now). While Fannie Mae and Freddie Mac are government-sponsored, they act independently and should continue as normal but, as government-sponsored entities, there could be delays. It’s possible that the request for documentation could take longer.
If a loan is being secured through Small Business Administration, an independent agency of the federal government, the loans could be delayed.
If a loan requires federal flood insurance, it could be delayed.
If you are a federal employee, facing a suspension in pay, and applying for a new loan, you may or may not be affected. There are lenders that consider you securely employed so if your new loan may be jeopardized, speak with another lender.

The common theme is to speak with a recommended, local lender or your loan servicer to provide expert advice and continue your payments or loan application process smoothly.

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