Many of my clients with loans in process have been concerned about the government shut down and how it will impact their home loans. I have checked with several lenders on this matter and here is what I was able to find out:
Conventional loans will likely not be impacted at all. However, buyers who are purchasing with FHA loans, VA Loans or those purchasing a property that is owned by HUD, FDIC, the VA or other goverment agencies might expect some delays.
A short term shut down will have little to no effect on loans. If the shut down extends beyond 10 days or so, it is more possible to experience some issues. The most likely issues to come up will involve tax return verificaiton via the Internal Revenue Service, Social Security Number verification via the Social Security Administration and loans seeking assistance from government programs such as USDA loans. It is my understanding that the Department of Vetrans Affairs will remain open and VA loans should not be impacted any more than non VA loans. FHA loans will most likely remain as usual though it is possible to experience some delays as staff may be thinner than usual. Another area that could impact loans is when a lender needs to get a flood certification as FEMA will likely be down as well.
Some lenders seem to be attempting to proactively come up with work arounds and will still close loans even without the ability to verify tax returns via the IRS, etc. provided other documentation is provided which gives them confidence the information provided is accurate and not falisfied in any way.
The bottom line is, the government shut down will not be good for any of us and the true fall out from it is somewhat unprecedented and, as usual, we will all need to be patient and work around the issues that it causes the best we can and expect a somewhat bumpy road as a result.
Note that if you are a government employee who has been furloughed, you will likely need to wait until the shut down has ended before your loan will be funded.