As most of us know, as of Oct 1st, 2013, our government was not able to approve a Continuing Resolution (CR) to the appropriations bills that fund our government functions. Therefore, most non-essential government funding has been suspended until legislation can be passed. This doesn’t quite mean that everything just shuts down; Social Security checks will still be mailed, air traffic controllers will be at their posts, and the banking system will continue to function.
So what affect does this shutdown have on Downtown San Diego Real Estate? We’ve complied this breakdown of everything that you need to know:
IRS: So, the IRS is closed. The worst part about it? They’ll have this figured out by tax time, so we don’t even get a break there. One of the main ways that the Real Estate industry needs the IRS is for Tax Return Transcripts (Form 4506T), which are needed during the client’s loan approval process. With the closure, many federally insured loans (FHA/VA) could experience funding delays. Make sure to add some additional time to your escrow if needed.
FHA: The Federal Housing Administration (FHA) will continue to endorse new loans in the Single Family Mortgage Loan Program (SFMLP). The SFMLP is funded through a “mulit-year” appropriations bill and therefore has received its funding already. While the department will stay open through the shutdown, some of the non-essential staff will be sent home, meaning you may experience processing delays. The FHA has announced that they will not be endorsing new loans in the Multi-Family Mortgage Loan Program though.
VA: Since VA loans are paid for by their user fees, the Departments of Veterans Affiars will continue to guarantee these mortgages. Again, the VA has warned to expect some delays in processing times.
Fannie Mae/Freddie Mac: Loans that are purchased and securitized by Fannie and Freddie will continue being processed, as their operations are financed by fees charged to the lenders.
As you can see, impact of the government shutdown on Downtown San Diego Real Estate will mostly be felt in processing delays on government insured loans. This really shouldn’t affect much in the way of mortgage lending, unless it continues for a long period of time. If you have any further questions about how the government shutdown can affect you as a buyer or seller, please feel free to contact us and we will be happy to talk with you. ')}