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How The Government Shutdown Will Affect Mortgages

how-government-shutdown-will-affect-mortgagesMany people are wondering how the government shutdown will affect the funding of mortgages.

The last time we endured a protracted gov’t shutdown was in 2013 when it lasted for 16 days.

PRIMARY CONCERNS: TAX TRANSCRIPT (4506t) VERIFICATIONS AND FLOOD INSURANCE

At that time, the only major holdup had to do with Tax Transcript Verifications (4506ts) and flood insurance.

These will likely be the only issues with our current shutdown as well.

HUD, FHA, VA, Fannie Mae and Freddie Mac will all be running normally with respect to mortgage industry needs.

So, some mortgage fundings will be delayed if tax transcripts (4506ts) and/or flood insurance are absolutely required prior to funding.

But, many mortgage loans do not require tax transcripts, some investors will allow borrowers to provide tax transcripts after funding (and after the shutdown ends), and very few loans in our markets require flood insurance.

Hence, for most lenders, it will be business as usual until the shutdown ends with some delays at the time of funding for loan programs (mostly jumbo) that have strict tax transcript verification and/or flood insurance requirements.

Here is an article from the National Mortgage News with more specifics as they relate to the shutdown.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646