The government shutdown has far reaching affects across the country, shutting national parks, furloughing federal workers, among many other thing. In one way or another, the government shutdown effects us all in a big way. And for those in the process of buying or selling a Knoxville home, the shutdown also touches the Knoxville housing market. If you’re are in the process of buying or selling a Knoxville home, here is a breakdown of how the Knoxville real estate market will be effected by the shutdown.
Even though a majority of loans are either underwritten, insured, or owned by the national government or an entity affiliated with the government, the mortgage market is not expected to be hit significantly. Loans are still expected to be processed as usual, but could take longer than normal to process. As a whole, Knoxville buyers and sellers can expect delays in certain loan approvals.
Loans purchased by Fannie Mae and Freddie Mac will not be influenced by the shutdown, since these loans are paid for by fees charged to the lender. VA loans will also continue to be processed as normal, since VA loans are funded through fees as well. There are expected to be delays with VA loans, though, since it could take longer to process certificates of eligibility and certificates of reasonable value.
FHA loans will also continue to be processed during the government shutdown, however, Knoxville buyers purchasing with FHA loans can expect longer wait times. The FHA will still process single family loans during the shutdown, however, a limited number of staff will be working during the shutdown. The FHA will not make any new multifamily loans during the shutdown.
During the government shutdown, the Department of Agriculture will suspend any new home loan activity during the shutdown. During the shutdown, the USDA will honor any conditional commitments on Knoxville loans that were issued before the shutdown. Unfortunately, any loans that were in process will not be processed during the shutdown.
Finally, a few additional items could cause delays in the Knoxville housing market. The Social Security Administration is closed, which could cause delays in loan processing, since they will not be able to verify social security numbers. In addition, the IRS is closed which can cause delays in loan processing as well, since the IRS will not be able to provide an tax transcripts as well.
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