Veterans and other eligible borrowers have had so many questions about how their home loan benefits are affected during a government shutdown. We have the answers.
Q: A VA Mortgage Is My Only Option, So How Do I Get One Now That the Feds Are Closed?
A: For the most part, VA and FHA loans should not be affected by a shutdown, as long as a shutdown is not extended for a long period. Go ahead and apply for your loan with the approved lender of your choosing. And, it's likely there will be no delay in the government stamp of approval.
For many borrowers a VA mortgage or FHA loan is the only or best option, especially first-time home buyers. These loans are easier to qualify for in part because they have low- and no-down payment requirements. Also, the government backs these loans so that lenders have the security to offer more favorable terms. For VA- and FHA-eligible borrowers who were counting on making home purchases in the near future with little or no cash down, a Government Shutdown may cause some confusion. And, some of these borrowers may already know that for them, a conventional loan with a higher down payment is not attractive or even know that it is out of the question entirely.
Some of you may remember previous government shutdowns, like the one in 1995. Things were a little different then. Government-backed loans weren't able to be processed as those offices were closed. Many approved borrowers had to wait for their government loan guarantees and endorsements until the Feds reopened for business.
Today, that's not a reason to wait, as VA and FHA loans are both still being processed.
Q: Now That We're In This Predicament Again, Are Government-Backed Loans Handled Differently Than During the Past Shutdowns?
YES! Both Departments have revised their shutdown procedures since 1995. Processing of VA and FHA loans are both considered essential services that Americans cannot afford to live without. Here are some facts to consider:
- Veterans Field Guide to Government Shutdown states that VA loan guarantees will not stop
- HUD says home loan endorsements are essential during any shutdown
- Both VA and FHA loans are made by private lenders that are not closed during a shutdown
Q: So Are There Enough Employees To Process All The Government-backed Home Loans?
As long as a shutdown doesn't last too long, we should see no delays. While the Government is shutdown, both U.S. Department of Veterans Affairs and the Federal Housing Administration are operating partially staffed. Fully staffed, the two departments combined can process more than 100,000 loans per month.
For first-hand information on how the VA and FHA process loans during a shutdown, visit their respective official websites.
If you're interested in an VA or FHA loan, there's no need to wait. Get in touch with a direct VA loan professional who specializes in government- backed mortgages.
Ready to Get Started?
If you're ready to get started, or just want to get more information on the process, the first step is to get multiple rate quotes with no obligation. You can then discuss qualifications, debt to income ratios, and any other concerns you have about the process with the lenders.