Tuesday, October 8, 2013

How does the Government Shutdown Affect Your Loan?

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How does the Government Shutdown Affect Your Loan
The shutdown is going to affect loans in many ways.  The impact of this depends on how long the government will be shutdown.  If there is a short shutdown, a week or less, it will be minor.  If the shutdown is longer than that, then it will become more difficult to close the loans.

Here are some items that will be affected:
  • FHA Loans: The approval process may be slowed due to limited FHA staff to respond to question and complete reviews
  • VA Loans: With the Department of Veterans Affairs continuing to operate as normal, VA Loan will not be adversely impacted in any way
  • USDA Loans: No new loan or guarantee will be made
  • Internal Revenue Service: The IRS will not process any forms, including tax transcripts, which are required for loan closing
  • Social security Administration: The SSA will likely not be able to verify Social Security numbers, which is required for loan closing
  • FEMA Flood Insurance: It is likely that mapping issues or amendments will be impacted
  • Fannie Mae and Freddie Mac: Fannie and Freddic will not be directly affected, excepts to the extent that they rely on verification and other functions of HUD, the IRS and the SSA

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