What the government shutdown means for your mortgage

By Holden Lewis

NerdWallet

The partial federal government shutdown is complicating the already complicated process of getting and managing a mortgage. For one thing, the political storm is like severe weather at a major airport: You can expect minor delays or worse. Also, it could mean financial hardship for some federal government employees facing mortgage payments without their regular paychecks.

Here’s how the shutdown is affecting homebuyers and homeowners — and what you can do about it.

IF YOU’RE GETTING AN FHA, VA OR USDA LOAN

If you’re getting a Federal Housing Administration or Department of Veterans Affairs loan, it’s likely you can expect delays in the underwriting process, and it’s possible your closing date will be pushed back as well.

There’s good news for most FHA-qualified homebuyers: Single-family FHA loans are being funded, even during the shutdown. FHA home equity conversion mortgages (known as reverse mortgages) and FHA Title I loans (financing for permanent property improvements and renovations) are the exception — and won’t be processed during the shutdown. The processing of VA loans will continue, according to the Mortgage Bankers Association, but you may have to wait.

Support staff at the VA and at the Department of Housing and Urban Development who handle underwriting or entitlement questions “are unavailable, so FHA/VA borrowers may experience delays,” says Ted Rood, a senior loan officer in St. Louis.

Because of the shutdown, VA and FHA spokespeople weren’t available to provide an estimate of how many borrowers could have their loans delayed. But the most-recent data suggest delays could potentially affect thousands of borrowers.

In January 2018, the FHA insured mortgages for 64,401 single-family homebuyers — of those, 82 percent were first-time buyers. The VA doesn’t report loan guarantees by month, but it guaranteed 148,379 loans in the first three months of 2018, or nearly 50,000 a month.

The U.S. Department of Agriculture isn’t approving new USDA loans during the shutdown. According to USDA data, the department guaranteed or made about 10,000 single-family loans each month in the most recent fiscal year that ended in September.

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