With Congress and the President at an impasse, it's worth looking at the impact of a government shutdown on real estate.

X Closed SignRob Clark, our go-to mortgage guy, has shared a list from PHH Home Mortgage on what might happen during a shutdown:

  • Tax transcript - If the IRS is on furlough, tax transcripts will not be available..
  • Flood insurance - Borrowers may have difficulty obtaining flood insurance through FEMA.
  • FHA - HUD may not support FHA Connection during their hiatus, and therefore we will not be able to order case numbers or perform other functions in FHA Connection while they are on furlough.
  • Rural Housing - We are not sure of the impact to GUS since that system was created since the last shutdown in 1995. However, we should anticipate the system will not be available. In addition we will not be able to get conditional commitments during the shutdown.
  • VA - The system by which VA appraisals are ordered will not be available.

Buyers must also take into account the loss of income brought on by a furlough and contact their lender immediately.   Let your agent shoulder part of the burden too.  Keep them apprised of your situation at all time.  In turn, they will work with the sellers agent to keep the contract in play.

Personally, I don't think we will reach a shutdown***, but a advance preparation and understanding never hurts.

Questions?  Give me a call at 703.927.4554.

Michael

 

**** although my hopes are dimishing rapidly

Michael Bergin

Your Realtor in Alexandria and Northern Virginia - ABR - SRES - Military Relocation

 
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5 Comments on Impact of Government Shutdown on Real Estate

APR
08
2011
1 Featured Post Outside Blog

Michael, wishing there would be a positive outcome to this shutdown is probably just that "wishful thinking".... I did recently see that DC is about the only Top 20 market with home price increases wich concerns me that our elected officials and government contractors are over-paying for their homes..... what say you?
1:58pm • #1
569,044 Points 1 Featured Post Localism Sponsor Outside Blog

Hi Michael,  Still hoping there are some adults in the room on this one.  Called my VA buyer to alert them also.
2:08pm • #2
262,130 Points 5 Featured Posts Attended Rain Camp

John -

No, they are not overpaying but everything is relative and for someone from the midwest or an area where home prices dropped significantly it must seem outrageous.  The truth is that while our area suffered, it was never as bad as the rest of the country, hence we are one of the first areas to start seeing increase.  Trust me though, folks are still looking for value.

Michael
6:16pm • #3
262,130 Points 5 Featured Posts Attended Rain Camp

Bill -

Even if there is a shutdown - which now looks more and more likely - it's not predicted to last long.  Even so, best be prepared.

 

MB
6:18pm • #4
APR
12
2011
1,308,033 Points 65 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Michael  While the shutdown was averted I suspect the debt ceiling battle will be a much debate more protracted debate
4:23pm • #5


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