What Happens to Real Estate If Government Shuts Down Again
February 1, 2018
Only two weeks after Congress passed a bill to reopen the federal government following a three-day shutdown, a repeat of that quagmire is looming. The budget bill Congress passed funds the federal government through Feb. 8, when another shutdown is possible if lawmakers don’t agree on a long-term funding before then. What impact will real estate feel should the government close once more?
Most home sales likely will be minimally affected because applications for mortgages backed by Fannie Mae, Freddie Mac, the FHA, and other agencies can generally continue to be processed. But closings could be delayed because agencies that verify some of the mortgage information—such as the IRS and Social Security Administration—won’t be at full staff if the government shuts down again. As a result, lenders could have to wait longer to get routine requests processed.
Read more about how a government shutdown impacts real estate.
For households buying a newly constructed home in a flood area, the transaction could be delayed until the government reopens. Lenders won’t be able to get new federal flood insurance written during the shutdown. Existing homes that already have flood insurance probably won’t be affected.
What happens to real estate during another shutdown is covered in the latest Voice for Real Estate news video from the National Association of REALTORS®, above. The video also looks at the role of robots in home showings, why a U.S. Department of Labor proposal holds a lot of promise for association health plans in real estate, and what’s happening with home sales.
Updated: July 14, 2020