{"id":4103,"date":"2018-12-23T09:45:28","date_gmt":"2018-12-23T14:45:28","guid":{"rendered":"https:\/\/dankrell.com\/blog\/?p=4103"},"modified":"2020-06-03T08:38:17","modified_gmt":"2020-06-03T12:38:17","slug":"shutdown-affect-home-sales","status":"publish","type":"post","link":"https:\/\/dankrell.com\/blog\/2018\/12\/23\/shutdown-affect-home-sales\/","title":{"rendered":"Does a shutdown affect home sales?"},"content":{"rendered":"\n
\"shutdown\"<\/a>
Home Sales (infographic from nar.realtor)<\/figcaption><\/figure><\/div>\n\n\n\n

There hasn\u2019t been this much anxiety about a government shutdown since October 2013<\/a>.  Back then, the government was \u201cshutdown\u201d for sixteen days.  Of course, when the federal government \u201cshuts down,\u201d it\u2019s really a partially interrupted.  A majority of government operations continue.  But even a partial government shutdown has the potential to affect home sales.<\/p>\n\n\n\n

Since only a portion of government employees get\nfurloughed during a shutdown, there is always confusion about which agencies are\naffected.  Back in 2013 many home buyers\nwere jittery about getting their FHA and VA loans processed so they could\nsettle on time (the FHA is a part of HUD, while VA mortgages are guaranteed by\nthe Department of Veteran Affairs). Additionally, many industry insiders were\nunsure about the impact a government shutdown would have on the recovering\nhousing market.  <\/p>\n\n\n\n

Today we have some idea how government housing programs, specifically mortgages, will be affected during this time because most federal agencies publicly post their shutdown contingency plans.  <\/p>\n\n\n\n

FHA\u2019s 2013 shutdown contingency was focused on\nmaintaining consistency in the housing recovery.  The contingency plan stated \u201cThe Office of Single Family Housing will\nendorse new loans under current multi-year appropriation authority in order to\nsupport the health and stability of the U.S. mortgage market.  Approximately 80% of FHA loans are endorsed\nby lenders with delegated authority.  The\nremaining 20% are endorsed through the FHA Homeownership Centers, leveraging\nFHA staff with a contractor that works on-site.<\/em>\u201d<\/p>\n\n\n\n

The current FHA contingency is confident that most FHA loans will be unaffected.  However, there is a warning that an extended shutdown can impact home sales.  HUD\u2019s <\/a>Frequently Asked Questions in the event of a Government Shutdown<\/a><\/em>, statement on FHA\u2019s operations states:<\/p>\n\n\n\n


“Because we are able to endorse most single family loans, we do not expect the impact on the housing market to be significant, as long as the shutdown is brief. With each day the shutdown continues, we can expect an increase in the impacts on potential homeowners. home sellers and the entire housing market. A protracted shutdown could see a decline in home sales, reversing the trend toward a strengthening market that we\u2019ve been experiencing.<\/em>\u201d <\/p>

<\/p><\/blockquote>\n\n\n\n

VA loans may be better positioned.  It is widely acknowledged that the Veteran Affairs learned from the government shutdowns that occurred in 1995-96. During that time, \u201cLoan Guaranty certificates of eligibility and certificates of reasonable value [appraisals] were delayed.\u201d  However, because VA funding includes \u201cadvance appropriations,\u201d a majority of the VA\u2019s operations will continue during a federal government shutdown (including mortgages).  The VA\u2019s contingency plan<\/a> indicates that in the event of a government shutdown 95% of VA employees will be fully funded or required to perform \u201cexcepted\u201d functions.<\/p>\n\n\n\n

Will a short-term federal government shutdown affect the housing market?  Probably not.  VA loans are expected to continue without much issue.  However, certain HUD functions required for FHA mortgages could be limited, but not expected to cause delays in the short-term. <\/p>\n\n\n\n

However, an extended shutdown has the potential to affect home sales.  Consider that FHA\u2019s mortgage market share increased to approximately 17 percent in 2017 (compared to about 13 percent in 2013).  Significant FHA settlement delays could occur in long-term, which would surely have an impact on the housing market.  However, considering that home sales have dropped off since the summer, and the market is typically slow during this time of year, the effect on housing will probably be negligible.  <\/p>\n\n\n\n

Original published at https:\/\/dankrell.com\/blog\/2018\/12\/23\/shutdown-affect-home-sales<\/p>\n\n\n\n

By Dan Krell<\/a>. Copyright \u00a9 2018. <\/p>\n\n\n\n

If you like this post, do not copy; instead please:
link to the article<\/a>
like it on facebook<\/a>
or re-tweet<\/a>.<\/p>\n\n\n\n

\"Protected<\/a><\/figure>\n\n\n\n


\nDisclaimer<\/a>.\n This article is not intended to provide nor should it be relied upon \nfor legal and financial advice. Readers should not rely solely on the \ninformation contained herein, as it does not purport to be comprehensive\n or render specific advice. Readers should consult with an attorney \nregarding local real estate laws and customs as they vary by state and \njurisdiction. Using this article without permission is a violation of \ncopyright laws.<\/p>\n","protected":false},"excerpt":{"rendered":"

There hasn\u2019t been this much anxiety about a government shutdown since October 2013.  Back then, the government was \u201cshutdown\u201d for sixteen days.  Of course, when the federal government \u201cshuts down,\u201d it\u2019s really a partially interrupted.  A majority of government operations continue.  But even a partial government shutdown has the potential to affect home sales. Since … <\/p>\n

Continue reading “Does a shutdown affect home sales?”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[76,689,139,288,55,13,26,1181],"tags":[837,1003,466,821,797,593,949,1182],"class_list":["post-4103","post","type-post","status-publish","format-standard","hentry","category-fha","category-government-shutdown","category-home-sales","category-housing-market","category-mortgage","category-real-estate","category-real-estate-market","category-va-loan","tag-fha","tag-government-shutdown","tag-housing-market-2","tag-mortgage","tag-real-estate","tag-real-estate-market-2","tag-va","tag-va-loan"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p1VZLf-14b","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/4103","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/comments?post=4103"}],"version-history":[{"count":15,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/4103\/revisions"}],"predecessor-version":[{"id":6000,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/posts\/4103\/revisions\/6000"}],"wp:attachment":[{"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/media?parent=4103"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/categories?post=4103"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dankrell.com\/blog\/wp-json\/wp\/v2\/tags?post=4103"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}