The headaches a government shutdown could create for people in the process of buying a home

A government shutdown (if it happens) could add headaches to the home buying process for thousands of people nationwide, and that includes buyers in the D.C. area, especially government workers in the process of buying.

“Federal employees, who might be in the middle of a mortgage application, who may be furloughed during that time and not get paid, that could cause a big slowdown in their process,” said Francki DiFrancesco, branch manager and senior vice president of mortgage lending for OriginPoint in Chevy Chase, Maryland.

The problem for federal employees is mortgage lenders need to verify the income of a buyer, but if a buyer is not getting paid, they wouldn’t have the paystubs necessary to close.

Also, anyone looking for a government-backed loan could also see delays in the processing of their applications.

“[Federal Housing Administration] and [Veterans Affairs] loans will operate on a reduced capacity,” said DiFrancesco.

Loans from the U.S. Department of Agriculture would also cease to operate because the funding isn’t there.

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An estimated 2,528 mortgage originations per working day could see those delays nationwide, according to Zillow.

DiFrancesco said other impacts include the inability to get a reverse mortgage or to get flood insurance for a new home through FEMA.

She said now is a good time for people in the middle of the purchase of a home to check with their lender and see how the shutdown may impact their loan process.

For federal workers who may be furloughed, DiFrancesco said they should reach out to their lenders if they know they’ll be impacted.

“If you know your job is getting ready to be impacted by the government shutdown, if one occurs, you will want to reach out to your lender ASAP,” she said.

DiFrancesco said the lender should help you figure out what steps need to be taken.

While this can be an anxiety provoking time for buyers who have their sights set on a home, DiFrancesco said during past shutdowns most sellers and others involved in the transaction have understood that this is all out of a buyer’s control.

“We’ve weathered the storm before, and I really do expect that we’ll weather it beautifully, again,” she said.

Mike Murillo

Mike Murillo is a reporter and anchor at WTOP. Before joining WTOP in 2013, he worked in radio in Orlando, New York City and Philadelphia.

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