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Kurt Spoerle - Realtor®
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After the federal government shutdown on Tuesday, some people are wondering how it will effect the U.S. housing market. According to real estate professionals, the extent to which it will effect home buyers will depend on how long the shutdown lasts. As long as this doesn't drag on for weeks, the impact should be minimal. However, borrowers who are in the process of obtaining home loans could see some delays. This is because lenders are not able to verify Social Security numbers or access Internal Revenue Service tax transcripts.

Without the income tax transcripts, loans are not able to close, which is a recent requirement that was put in place to help fight fraud after the mortgage crisis.

It is believed that if we go two weeks or longer, the shutdown will have an impact.

The Federal Housing Administration insures home loans for first time home buyers and for low or middle income buyers. HUD said that the agency will continue to endorse new home loans even with a reduced staff. Loan officers will be able to get a case number, which is the first step of the process, but they won't have enough employees to be able to answer questions as the loan moves forward.

Fannie Mae and Freddie Mac will see business as usual and same with the U.S. Department of Veterans Affairs.

However, much of it will depend on where borrowers are in the process of buying a house and when they are scheduled to close.

For now, all we can do is sit back and wait to see how long the shutdown will last.

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