FAQ: How Will a Government Shut-down Delay My Mortgage Loan Application?


FAQ: How Will a Government Shut-down Delay My Mortgage Loan Application?.

via FAQ: How Will a Government Shut-down Delay My Mortgage Loan Application?.

VA Loans

Like FHA loans, VA Loans are underwritten according to the VA standard. However, there are some instances where a delay in ordering appraisals could occur, but because most of that is handled electronically the delays should be minimal.  However, unlike AES Lending,  there are some  lenders who do not issue Notice of Values who have to obtain the NOV form the VA and will not be able to close a VA Loan during a government shutdown.   Therefore if you are applying for a VA loan during the 2013 government shutdown you should check with your lender first and see if they will be able to issue a Notice of Value or if they will require the VA to issue one. I  the answer is the latter, then you will not be able to close your loan until a bargain is made to fund the government otherwise the VA Loan Program remains open.

USDA Loans

The USDA has a long history of running out of money by the end of their fiscal year which is September 30 and this year is no exception. In years past, lenders would continue to underwrite and approve and fund these loans with the promise (loan approval)  from the USDA that upon congressional replenishment if their funds, they would issue the guarantee.

USDA files can continue to be processed, underwritten and shipped to USDA; however no Conditional Commitments will be issued until the shutdown is over.

Reminder that the October 1st change to eligible locations has also been put on hold for the moment but it is  unknown if the change to the new list will be backdated to 10/1/13.

Originators may continue to accept and process loans that would be eligible under an old area but not under the new designated areas; however recommend making clients aware that loan may need to be switched to FHA program if property is deemed no longer eligible.

However, because this year it is expected that many of the USDA eligible maps will be re-drawn, this could impact buyers who otherwise may have been shopping in an area that was slated to be no longer eligible for USDA housing.  Lenders who in the past may have accepted the approval and promise to issue the guarantee, my not be so eager to fund those loans until congress fully funds the USDA Rural Housing Development program.

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5 thoughts on “FAQ: How Will a Government Shut-down Delay My Mortgage Loan Application?

  1. Pingback: Federal Government shutdown and their effect on FHA, VA, USDA loans in Kentucky | Kentucky USDA RHS Rural Housing Mortgage Loans

  2. Pingback: Property Trax: Federal shutdown threatening local mortgages, rental assistance : Wsj | Kentucky First Time Home Buyer Mortgage Loan

  3. Pingback: Property Trax: Federal shutdown threatening local mortgages, rental assistance : Wsj USDA Rural Development’s Single Family Housing Guaranteed Loan Program | Kentucky USDA RHS Rural Housing Mortgage Loans

  4. Pingback: USDA Lending Tip; Eligible Homes Locator Map | Kentucky USDA RHS Rural Housing Mortgage Loans

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