What Does the Government Shutdown Mean for the Housing Market?

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The short term effects might be minimal for a lot of people in the housing market but for our business we are shut down as HUD and the VA are not processing any Condo approvals. We are still compiling data and getting projects ready to submit but until HUD and the VA are back up and running we can’t send any packages in. This will be remembered in the 2014 elections for both parties. Please read the article below.

The FHA Condos Approval Company, Inc.

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As the federal government ground to a halt Tuesday, the question of how the shutdown will affect the housing market remains at the front of everyone’s mind. How will the market react? The answer: it depends.

Mortgages will continue to proceed through the usual government channels, although some delays are expected.

More than 90 percent of the residential housing market depends on the government and/or the GSEs for underwriting, insurance, and funding. Mortgages controlled by Fannie Mae and Freddie Mac will not be affected because they are funded by fees from lenders rather than federal appropriations.

Some concern has been raised about how the employment verification process would proceed in the event of an IRS shutdown. Freddie Mac issued the following clarification to lenders Tuesday: “If a loan is made to a government employee and the closing date is during the shutdown period, you do not need to obtain employment verification or re-verification prior to closing if a government office providing the verification is not able to do so as a result of the temporary shutdown. You are also not required to obtain employment verification or re-verification for such loans after the shutdown ends. This exception does not apply to income verification or any other requirements…We only require IRS Form 4506-T to be signed by the borrower prior to closing. We do not require that 4506-T be processed by IRS prior to closing. However, we require that the actual 4506-T information is obtained as part of the Seller’s in-house QC program.”

To read the complete article please use the link below.

Government Shutdown

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