The government shutdown is having a trickle-down effect in many businesses including real estate. In Las Vegas, many homebuyers have ceased to move forward with home purchases due to job loss or job uncertainty. Some of them work for private sector companies that have had to furlough workers. Others are still working, but their jobs are on the line.
Some loans are also running into trouble. Many of the resources used to verify income and employment while in escrow on a home purchase are closed. That means some lenders are prevented from being able to move forward with the buyer’s loan. Many lenders are coming up with workarounds so that they can still close the loans. For example, CMG Mortgage in Las Vegas is waiting the 4506-T requirement, which verifies borrower transcripts, during the period of the shutdown.
USDA offices are closed but FHA and VA loans are still possible. The websites for both departments are still functional and the VA Benefits Administration still has a third of their employees working and trying to facilitate VA support.
The next big issue is the required raising of the debt ceiling. The deadline date for the debt ceiling debate is October 17, so we can expect lots of political posturing and fighting in the next couple of weeks before we see resolution.