How Government Shutdown Affects REALTORS®?

Now that the Federal Government has shut down, what does it mean for the real estate industry?  It means many, but not all, government programs, including some that impact federal housing and mortgage programs, have been suspended or slowed due to the lapse in government funding. The National Association of REALTORS® has released a brief on some of the issues that will occur with the Government adjourned until further notice.

Federal Housing Administration
FHA cannot offer endorsements for any new loans in the Single Family  Program and cannot make commitments in the Multi-family Program in the  event of a shutdown. FHA will maintain operational activities including  paying claims and collecting premiums. Management & Marketing  (M&M) Contractors managing the REO portfolio can continue to  operate.

VA Loan Guaranty Program
Lenders may continue to process and guaranty mortgages through the Loan Guaranty program in the event of a government shutdown.

Internal Revenue Service (IRS)
Should the federal government shut down, the IRS cannot process  federal income tax returns or issue refunds (but it can deposit tax  payments). Consumers who were expecting to use their tax returns as part  of the down payment for a home purchase will temporarily not have  access to these refunds.

Flood Insurance
The Federal Emergency Management Agency (FEMA) confirmed that the  National Flood Insurance Program (NFIP) will not be impacted by a  government shutdown.

Rural Housing Programs
For the US Department of Agriculture programs, essential personnel  working during a shutdown do not include field office staff who  typically issue conditional commitments, loan note guarantees, and  modification approvals. Thus, lender will not receive approvals during  the shutdown. If the lender has already received  a conditional commitment from the Rural Development office, then the  lender may proceed to close those loans during the shutdown. A  conditional commitment, which is good for 90 days, is given to a lender  once a USDA Underwriter approves the loan. If a commitment was already  issued, the funds were already set aside and the lender may close the  loan at its leisure. If Rural Development has not issued a conditional  commitment, the lender must wait until funding legislation is enacted  before closing a loan.

Government Sponsored Enterprises
Fannie Mae and Freddie Mac will continue operating normally, as will their regulator, the Federal Housing Finance Agency.

Treasury
No official word as of yet, but the Making Home Affordable program,  including HAMP and HAFA, may not be affected as the program is funded  through the Emergency Economic Stabilization Act which is mandatory  spending not discretionary.