Shutdown could impact prospective homebuyers

Shutdown could impact prospective homebuyers

Posted: Updated:

Just as the road to the American Dream seemed to be making a comeback, the government shutdown could impact prospective homebuyers looking for a loan.

"One of the things that lenders have been doing for the last few years is verifying individual borrowers' tax returns with the IRS. That process has stopped with government shutdown. If that continues for long term, lenders may be more hesitant to fund loans," mortgage lender Brian Berman said.  

Berman said that he has fielded several phone calls from concerned buyers. So far, none of his clients have hit any major roadblocks, but the problems may arise the longer the shutdown continues.

"The ability to buy a house from HUD, from what I understand, has slowed down. The office is at a skeleton crew," he said.

A recorded message at Atlanta's Housing and Urban Development indicated that their office was closed on Friday due to the government shutdown.

The federal Housing Administration is now running at less than a tenth of its normal size. The shutdown comes as construction and new housing sales have started to climb out from the financial crisis.

There is still another hurdle looming; the U.S. Treasury has set Oct. 17 as the debt limit deadline.

"Right now, interest rates are fairly low. If the government were to default on some debt, I think that could have a huge impact on interest rates. Probably push them up quite a bit, probably push them up to multi-year highs," said Berman.

Furloughed employees who are currently in the loan process could see mortgages denied given the differential in income as they continue to go unpaid.

Powered by WorldNow
Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | New Terms of Service What's new | Ad Choices