How the government shutdown affects your mortgage

January 21, 2019

NerdWallet.com posted a great article recently titled, “What the Government Shutdown Means for Home Loans” and rather than making you read the entire article, I thought I could give you the short version.

Thinking about buying a home with a FHA or VA loan?

Good news, FHA and VA loans are still being funded. There have been some delays in the underwriting process, but loans are still processing and closing. In fact, in the first half of January 2019 in the midst of the government shutdown, FHA still funded over 64,000 loans!

The Department of Veteran Affairs reports they will also continue processing VA loan requests.

What about Conventional loans?

Most mortgages are considered conventional loans, as they are not backed by the federal government. These loans are typically backed by Fannie Mae and Freddy Mac which are governments back entities, but these are privately own companies, so they are not affected.

The largest issue home buyers are running into is collecting missing tax transcripts as the IRS is closed. Some lenders are accepting signed tax returns over their typically required transcripts especially for self-employed borrowers.

Are you a Federal employee and not getting a paycheck? How will you make your house payment?

If you are a federal employee and not getting a paycheck it may be difficult for some to make their mortgage payment. Rather than missing or delaying the payment, call your mortgage company immediately!

Many mortgage companies can offer a forbearance when times are tight and your income has been reduced. This would be a temporary reduction or suspension of your mortgage payments.

A short term loan from a 3rd party lender could be an option as well to make these payments. Navy Federal Credit Union, for example, is offering 0% APR loans of up to $6,000 for federal employees.

The important thing to note is talk to your lender and make arrangements BEFORE your credit takes a hit for a late or skipped payment!

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