How will the government shutdown affect your real estate transaction?

The government shutdown will affect everyone, but one large question on the minds of buyers and sellers is: how will it affect our real estate transaction? The shutdown will impact some closings depending how far along they are in the process.

What will be affected:

Tax Transcripts: The IRS will not be processing 4506 & 4506T Tax Transcripts. For verification of income these are required by most loan types and if you are self employed they are always required.

FHA Home Loans: Only about 2% of the HUD’s Office of Housing employees will be working. However, HUD has informed banks that daily operations will continue.

USDA Home Loans: If you do not already have a conditional commitment, then you will not be able to receive a rural housing home loan until the shutdown is resolved.

Social Security Verification: The Social Security Administration will not be verifying any Social Security numbers. Even providing your card is not always the only verification required.

What will NOT be affected:

VA Home Loans: Lenders will continue to process and guaranty mortgages

Conventional and CHFA Home Loans: These should not be delayed unless your loan requires tax transcripts or social security verification

Denver Metro Mortgage Assistance: The 4% grant program for down payment and closing costs will have no delays

Is there an upside?

If mortgage rates keep falling due to the lessened demand over shutdown concerns, it could be a good time to lock in a lower rate! As always, please call me with any questions or comments…maybe even to help you find your next dream home!

Colorado Association of Realtors

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