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2013-10-02 13:10:37
Government Closes!!!Now What?



The impact of the government closure is not entirely known.  National Parks, Government Buildings, IRS, Veteran Affairs, and FHA are those that immediatly come to mind, some will be closed entirely others will have skeleton crews to attempt to offer the bare minimum of services.  Whether you agree or strongly oppose what has happened in Washington sadly we will all be affected, I am personally hopeful that this will be resolved quickly for a myriad of reasons.  As mentioned the full impact of what has happened is not know I would however like to address how this closures may affect the real estate market:

Real Estate will not be impacted immediatly.  Homes will still sell and be placed on the market for sale, but there are issues that could delay home loans being approved that I have outlined below.

 FHA Loans

  • Lenders will be able to obtain a FHA case number from the FHA Connection
  • Limited FHA staff to respond to questions
  • CAIVRS will be available to determine if a borrower has a delinquent federal debt
  • FHA Total Scorecard will be available
  • FHA will collect the Upfront MIP during a shutdown


  • The Department of Veterans Affairs (VA) will continue to operate if there is a government shutdown, which means lenders will be able to continue originating VA-guaranteed loans.  lenders will be able to obtain the Certificate of Eligibility online, and they will still be able to submit applications and follow up on COEs that require more research with the Atlanta Eligibility Center.


Will VA loans be adversely affected in any way?  Answer = no


  • Indications are that Rural Development will cease all but essential functions and no new loans or guarantees will be made.


Will we be able to obtain a conditional commitment?  Answer = No

Can we close a loan without the conditional commitment?  Answer = No

Can we close a loan if we have the conditional commitment?  Answer = Yes

Internal Revenue Service (IRS)

  • The IRS will NOT process any forms, including tax transcripts (Form 4506T).

Can loans close without the tax transcripts?  Answer = No

Social Security Administration (SSA)

  • The SSA will likely NOT be able to verify social security numbers.

Loans can not be closed without verifying the social security number?  Answer = No

Fannie and Freddie

  • Fannie and Freddie would not be directly affected, except to the extent they rely on verification and other functions of HUD, IRS, and SSA.

They are however going to be impacted by the closure 

Federal Reserve

  • The Federal Reserve – including the reserve banks – is not funded through the annual appropriations process;  thus a government shutdown would have no impact on Federal Reserve operations, including payment system and open market functions.

Consumer Financial Protection Bureau (CFPB)

  • The CFPB is not funded through the annual appropriations process; thus a government shutdown should have no impact on CFPB operations.

FEMA Flood Insurance

  • It is likely that mapping issues or amendments will be impacted.
  • Most functions will be unaffected because of their use of contractors and public/private partnerships.

Will I be able to get flood insurance?  Answer = yes

If the subject property is not yet mapped by FEMA and needs research by FEMA will my loan be affected?  Answer = yes

Can I close the loan if mapping research cannot be completed by FEMA?  Answer = no


I hope that this information is helpful.  If you have any questions please give me a call or email.  There are a lot of things that are up in the air, but just because the government closes doesn't mean we stop working, living, eating or sleeping.  


Ben 801-930-0103

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