Will The Government Shut Down Prevent Me From Buying or Selling?
As of October 1st, The Federal Government has officially shut down. No Doubt, you have heard this from every 
National news program and social media site today. The government shutdown will have a great impact on the workers who have been furloughed when all they want to do is work. Some have been inconvenienced by closures of everything from the National Parks to obtaining passports. Let's hope that Congress can set aside their differences and do their jobs very quickly.
I've had folks asking, Can I buy or sell a house during the
Government Shutdown? How will the shutdown effect my transaction? Can I still close?
The short answer is YES. Yes you can still buy or sell. However, there are few things we are keeping in mind as we go forward during the shutdown.
Fortunately many of the lender programs FHA, VA, Fannie and Freddie are all working and loans are being approved. The National Association of Realtors is up to speed and they’ve issued a brief: What a Government Shutdown Means for Realtors.
Per NAR, the wheels will keep turning yet we will likely come out of this with a bit of a back log:
FHA: will continue to endorse new loans in the single family mortgage loan program but will not make any new commitments in the Multi-family Program during the shutdown.
VA: Lenders will continue process and guaranty mortgages thru the Loan Guaranty program, although there may be some delays.
Fannie Mae & Freddie Mac: operating as normal as will the regulator as they are not reliant on appropriated funds.
Rural Housing: This is more tricky, the field office staff who typically issue conditional commitment, loan note guarantees & modifications are considered “nonessential personnel”. During the Shut down, no new commitments will be issued. IF a commitment was already issued to your lender then you may close.
Internal Revenue Service: I know hearing that the IRS is closed could make some jump for joy. Unfortunately, the closure means the processing of all forms has been suspended. What this means for anyone getting a loan (FHA, VA) is that tax return transcripts will not be provided. Delays can absolutely be expected, even when the IRS opens back up for business.
Social Security Administration: Also closed & most of it’s customer services functions are shut down. Verifying social security numbers through the SSB Verification Services will be suspended. This is used for loans as well.
So, what’s the take away? Patience. It’s not just a virtue. We will need it over the next few weeks or month. Even after the government back on track, there will be a back log that needs to be dealt with in several agencies. In the mean time, the best advice to buyers and sellers is keep moving forward. Let’s get your house on the market, Let's get you pre-qualified with a lender. We can continue to write offers, negotiate terms and do inspections. We just need to be prepared that a short escrow may not be possible due to atypical circumstances, so best to plan for longer.
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