The last fit and start toying with the idea of a Federal government shutdown was in April with getting the funding covered through the current fiscal year. Well it seems heading toward August 2nd, our Bozo's, I mean lawmakers, are playing with fire again, this time threatening to not fix the raising of the debt ceiling that is at issue. If not raised, HOW will they pay the bills for the military, social security, medicare, medicaid, interest on the governement bonds, etc.?
It will impact housing if we go into a stall or a formal government shutdown.
Six Areas To Watch Out For With A Possible Government Shutdown
- FHA Case Numbers: Each FHA loan needs one of these numbers. It is generated prior to the appraisal being ordered. If the shutdown occurs, possibly you can't get the number. As soon as a contract is ordered have the lender get the case number. You must have an executed contract to get a number. Closing the FHA loan past an August 2nd shutdown would depend on what HUD says the rules are if you do have a case number. That is uncertain.
- 4506 IRS Transcripts: This is the verification of at least one tax return required per loan by the IRS. Validates between the IRS and what the taxpayer prepared. The IRS would not be at work to do this, so a delay. Get this done prior to August 2nd.
- Verifying employment of a government employee: Could only do this prior to August 2nd as you would be unable to do this during a shutdown. Do it NOW.
- FEMA or Homes in a Flood Zone: Could not close these homes that are in a flood zone as flood insurance could not be obtained. Get the flood insurance now.
- USDA: The government underwriters that insure these category of loans would not be available so if you have this kind of financing it needs to be approved before a shutdown.
- VA: This area is more iffy than FHA. Will they leave their website up, operational and functional? If disrupted it would cause delays in VA appraisals and issuing certificates of eligibility. If the website was closed during a shutdown, then there would be delays to all VA loans.
It does seem the theme with all these ideas is NOW, or sooner than later, cause if you don't have the details in hand worked out or even CLOSE by or before August 2nd, you may have problems. Maybe move the closing earlier by some days. Last spring the shutdown was averted, but we will see this time.
Fun times inside the Beltway, NO???