Today David talks about the partial government shut down and how it affects real estate. There are three ways that real estate can be affected by the shutdown.
1. Verification of identity and income through the Social Security Administration and the IRS. Lenders use these 2 agencies to verify a borrowers income and identity. There is a lot of fraud in real estate which makes these agencies very important to lenders. They are still moving forward with loans, but if they notice more fraud, the process will start to slow down.
2. FHA and VA loans make up 15%-30% of the home loans taken out today. FHA and VA loans are government-backed loans. These loans are being processed by a skeleton crew, and it will take longer to process the loans than it did before. This could be a problem for buyers who are looking to close quickly.
3. The partial shutdown provides uncertainty in the market. Anyone that was looking to buy a home and has a government job that has been affected by the shutdown will have to postpone their home buying until the shutdown is over.
The real estate market isn't being affected too much at this time, but the longer the shutdown lasts the more significant impact it will have.