Shutdown leads to likely delays in government funded home loans

GREEN BAY, Wis. (WBAY) -- Democratic leaders expressed concern on Tuesday night about families across the country unable to get approved for mortgages during the government shutdown.

However, the Realtors Association of Northeast Wisconsin says the impact has not been felt locally yet.

The government shutdown is happening during what local real estate agents call one of the slowest buying times of the year.

"I know there's a lot of negative opinion out there that this is going to last for two months. I don't see that happening," said Judd Stevenson, president of the Realtors Association of Northeast Wisconsin. "I think our Congress and our President will finally work together by the end of the month."

The U.S. Department of Housing and Urban Development is one of the federal agencies currently closed.

"HUDs contingency plan states that the FHA will endorse new loans and single family mortgage loan programs," said Stevenson. "It will make new commitments in multi-family and it will maintain operational activities."

Local mortgage brokers say one type of government loan financing has come to a halt.

"Around the Brown County area, we've got a lot of rural properties. So, the USDA has a loan program, and right now it's not operational," said Olaf Krawinkel, a senior loan officer with Commonwealth Mortgage Group. "We can't submit for those loans."

Krawinkel says the shutdown means limited access to tax return transcripts and other documentation requested by lenders to verify the loans.

"Like with anything, this industry changes constantly. There's updates and regulations, so we adjust to it. We do our best to kind of keep the needle moving so to speak and keep people on the path to home ownership the best we can," said Krawinkel.

Both Krawinkel and Stevenson agree that the current political climate should not stop home buyers from searching for the right house. Instead, they encourage people to remember that government loan financing could see delays.

"What used to be a two to four week process is now turning into a six to eight week process," said Krawinkel.

"We tell people wanting to buy to continue the process and go as far as you can until it stops," said Stevenson.

Stevenson also says the National Flood Insurance Program will continue paying out claims and taking applications during the shutdown.



 
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