This BLOG On Government Reopens And What This Means For Housing Market Was PUBLISHED On January 26th, 2019
The 2019 historic partial government shutdown has temporarily ended on Friday January 26th, 2019.
- Government Reopens temporarily until February 15th, 2019
- The government reopens for three weeks
- During the upcoming three weeks, President Donald J. Trump will negotiate with Congressional Leaders for border security funding
- Government reopens after 35 days of being shut down
- This partial government shutdown has been the longest shutdown in U.S. history
- It has affected an estimated 800,000 federal workers
- These furloughed federal employees went without a paycheck for over a month
- Many suffered paying their mortgage payments
- Many government workers had homes under contract and affect them closing on their home closings
- Government Shutdown affected mortgage lending and caused many delays in closing loans
- The shutdown also affected federal workers paying their home mortgages
- All USDA Mortgage Underwriters were furloughed and USDA Loans were at a standstill until yesterday when the government reopens
Government reopens but this does not mean that home buyers and lenders will not be safe. The government can be shutdown again in three weeks.
Government Reopens After Longest Shutdown In U.S. History
The government has been shutdown since December 22nd, 2018.
- Prior shutdowns were full government shutdowns unlike this partial shutdown
- 25% of the federal agencies were closed
- This affected over 800,000 federal workers
- The remaining 75% remained open
- Many agencies had employees work without pay
- Returning federal workers with get full back pay
- The partial shutdown at first affect home buyers
- IRS 4506T income verification transcripts could not be done due to IRS being impacted
- This caused delays
- HUD was affected but was open with a skeleton staff
- VA was not affected
- Neither was Fannie Mae and Freddie Mac and conventional loans
However, closing delays did happen due to the trickle effects of the affected federal agencies. All USDA mortgage underwriters were furloughed so USDA Loans came to a complete standstill.
Are USDA Borrowers Safe To Proceed With Mortgage Process?
USDA borrowers were the most affected during this partial government shutdown. All USDA underwriters were furloughed. USDA Loans has a two step underwriting mortgage process. Each USDA lenders underwrite USDA Loans. After the lender’s underwriters underwrite and sign off on the borrower, it gets sent to the regional USDA Office. It then gets signed off by a government USDA underwriter. The loan cannot get a clear to close and funded without the USDA government mortgage underwriter signing off on it. If the government shuts down again on February 15th, 2019, it will affect USDA home buyers. This can mean disaster for USDA buyers, sellers, and lenders. Stay tuned for more news from Gustan Cho Associates Mortgage News.
