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How will the government shutdown affect home loans?

Tuesday, October 1, 2013 - Article by: ShiloZitting - Shilo Zitting / The Z Mortgage Team - Message

Initially at least, the mortgage market is likely to be only minimally impacted. New loans will continue to push through most government agency pipelines. What will change is how long the... process takes, as many agencies expect to experience delays.

Mortgages purchased and securitized by Fannie Mae and Freddie Mac will be unaffected because their operations are paid for by fees charged to lenders. And the Department of Veterans Affairs will continue to guarantee mortgages for Americans that have served in the military since these loans are funded by user fees as well.

One government lender that will indeed suspend its home loan activity, however, is the Department of Agriculture. The USDA says that no new housing loans or guarantees will be issued through its Rural Development programs in a shutdown. The department also warns that such a scenario could cause "a setback in construction start-up," and if the shutdown lasts for an extended period, "a substantial reduction in housing available in rural areas relative to population."

If you have any questions regarding your home loan or how it will affect you getting a home loan, please feel free to contact me. (information via

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