As if home buyers didn’t have enough to worry about. In addition to elevated interest rates and high home prices, Americans applying for government-backed mortgages may face unexpected delays in the event of a partial government shutdown.
As the new fiscal year approaches on Oct. 1 with no funding in place as lawmakers have yet to reach a deal, the Biden administration has already begun advising federal agencies to review and update their shutdown plans. If Congress doesn’t pass legislation to renew funding by Sept. 30, the federal government will shut down at midnight, which has significant implications for the U.S. consumer.
“ in the event of a partial government shutdown, according to an analysis by Zillow exclusively provided to MarketWatch.”
Home buyers could face delays taking out a government-backed mortgage. People in the middle of closing on a home — who are taking on a Federal Housing Administration loan or a Department of Agriculture loan — would need the agencies to finalize their mortgage. When the government shuts down, federal agencies work on a limited staff, so fewer applications get processed. If those agencies halt operations, thousands of buyers may be left in the lurch, with the risk of their home sale falling apart, if the sellers turned to other buyers who may have other sources of funding, or come with all cash. An estimated 2,528 home loans per day may be delayed in the event of a partial government shutdown, according to an analysis by Zillow exclusively provided to MarketWatch. “A government shutdown would leave some aspiring home buyers with outstanding loans in limbo,” Nicole Bachaud, senior economist at Zillow, told MarketWatch. Read on: How a partial government shutdown would affect you The Trump-era 2019 shutdown was the longest in U.S. history, when the federal government closed for 35 days. At that time, then-President Donald Trump wanted more funding for a border wall between the U.S. and Mexico. Zillow economists Nicole Bachaud and Jeff Tucker noted then that when the government entered a prolonged shutdown in early 2019, government agencies were operating with limited staff and, hence, were experiencing delays. In the fourth quarter of last year, the FHA originated 140,888 single-family loans, the Zillow economists noted, over 61 working days. That works out as an ave …