If you are buying a home, you may be asking yourself how the looming government shutdown can affect you. While the impact of the shutdown is still somewhat unclear here is some information to help you determine where you stand.
FHA loans will be affected by a shutdown. They will not be able to offer any new endorsements for any new loans in the Single Family Program. They will be able to continue to pay claims and collect premiums but they will not be endorsing new loans. If you are currently in escrow or your offer is accepted while the government is shutdown this will cause a delay in getting your loan funded until the shutdown ends.
VA loans will not be affected.
Rural Housing Programs will be affected. They will not be able to issue conditional commitments, loan note guarantees, or modifications of approval. This will delay your loan processing until the shutdown ends. If you have already started the process and have received these items, your loan should be able to close as scheduled.
Making Home Affordable programs; including HAMP and HAFA, SHOULD not be impacted. These programs were funded through the Emergency Economic Stabilization Act which is mandatory spending not discretionary and it is the discretionary funding that will not be issued during a shutdown.
If you are currently in escrow or enter escrow during a shutdown, make sure you check with your lender to find out exactly how your loan will be affected. In a "typical" transaction in California you have 17 days to do your inspections, appraisals and such. At the end of the 17 days you MAY be required to remove all your contingencies including your loan contingency. You need to make sure you will be able to get your loan funded during this time. If you try and cancel your escrow after this, you risk losing your deposit so make sure you will be able to get your loan.
1 comment:
In this market with so many buyers wanting to take advantage of record-low prices, it’s not uncommon to find yourself in a competitive bidding situation. This is why it’s so important to already have the three previous items under your belt. As an agent, I’ve had buyers who thoroughly understood the value of a property and as a result were able to out-bid other buyers and still get an outstanding deal on the home.
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