Government shutdown impacting home loans

As the longest government shutdown in U.S. history has now surpassed 30 days, the long-term effects are beginning to trickle into the public sector.

A variety of federal government loans are taking more time to be approved than usual, or in some cases, are on hold altogether. Additionally, the United States Food and Drug Administration (FDA) is battling to adequately bolster food inspections. 

Mortgages and home loans
According to officials, delays can be expected for Federal Housing Administration (FHA), Veterans Affairs (VA) and United States Department of Agriculture (USDA) housing loans.

“We are anxious to see the shutdown lifted as it’s slowing things down a bit,” said Lee Warbinton, branch manager for Waterstone Mortgage. “This is the busy season for mortgages. Historically, we are able to close a loan in 25 days. We are asking people to expect up to 40 days for a closure.” 

Conventional loans, which are not a function of the federal government, may be affected if facilitated by government-sponsored entities. This may include Fannie Mae and Freddie Mac, two of the largest government-sponsored enterprises for home loans. 

While the companies are private entities, information required for underwriting by the federal government might be delayed.

A lack of access to federal income tax transcripts may also affect self-employed individuals, said Tom Sawyer, a senior mortgage banker at Home Lending Group. 

“USDA loans and that production line, in particular, has been a bit slow,” Sawyer said. “Rumor has it that some of those officers are having people come back to work without pay to help speed the process.”

Sawyer said USDA loans are not as common in Kyle and Buda, as these loans are typically utilized in rural areas. Growth and development in Hays County has eased the use of USDA loans. Small portions of residential housing considered ‘non-essential’ are also not open; residents can expect delays in getting in contact with those offices.

FDA and food inspections
On Jan. 9, the FDA halted some food inspections after the government shutdown. However, four days later, FDA Commissioner Scott Gottlieb said “high-risk” food inspections will begin once again. 

According to reports, roughly 150 furloughed FDA employees have been called back to work on inspections, most of them without pay.

“More staff could be on the way, depending on needs. This is a snapshot of some of our current inspection work on high-risk assignments,” Gottlieb tweeted earlier this month. “Taken together, it’s smaller than our usual footprint. But we’re targeting the riskiest products to make sure the Americans remain protected.”

A regional representative for H-E-B did not respond to emails on how the grocery chain is combatting FDA’s lack of staffing prior to press time.

Weather forecasts still in operation
Despite the shutdown, the National Weather Service (NWS) Austin/San Antonio office in New Braunfels remains open. However, an employee contacted could not comment to the Hays Free Press if they are receiving compensation at this time.

“NOAA’s National Weather Service has people working twenty-four seven during the shutdown to perform mission essential functions to protect lives and property,” said a spokesperson for the National Oceanic and Atmospheric Administration. “Observations, forecasts, watches/warnings, and all of the infrastructure to support these operations continue to be sustained, meeting all operational readiness levels. These functions are critical to providing life-saving decision support to emergency managers in every county of the United States.”

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