VISALIA, Calif. (KFSN) — Almost a month into the government shutdown, with no end in sight, the impacts are being felt across the real estate industry.
“Very frustrating this time because I don’t have the same avenues this time because they are either closed or they don’t have enough people or staff to help me,” says homebuyer, Lisa Brown.
With short-staffed government agencies getting proper documentation for FHA loans can take several weeks.
“I worry because here I am packing my house up thinking my escrow is going to close but is it or isn’t it? Am I going to get that document they need by the 30th day or not?” explains Lisa, who is buying a home out of state.
One local Real Estate agent says although the industry continues to stay busy and impacts have been minimal to FHA and Conventional loans.
The VA loan process has seen about a 2-week delay.
His advice, “Anything that has to do with getting approval from the federal government I would say taking into caution, in your contract maybe writing a 30 day maybe writing a 45 day escrow to not need to ask for an extension,” explains Cesar Gomez, with Century 21 Jordan-Link & Co.
Local loan experts say the Department of Agriculture has stopped approving new USDA loans- which are geared towards helping low to moderate income households.
Plus, some government flood insurance has come to a halt.
“FEMA cannot issue new flood insurance policies or renew existing policies during the shutdown. Clients would need to obtain private flood insurance during this time if they are in a flood zone,” says The Money Store Visalia branch manager, Lizbeth Williamson.
In the meantime clients should expect delays and have their paperwork in order ahead of the homebuying and loan process.
“We let clients know up front that because of the government shutdown there may be additional delays. We just prepare them ahead of time and try to collect everything we can up front from the client to process their loan in an expedited manner,” continues Williamson.
Gomez continues, “If your job security is there, then you need to continue moving forward with your process. If you do work for the federal government and you are on those payrolls, we suggest you wait to see what is going on.”
Leaders in the real estate community say they will continue preparing for possible obstacles, while hoping for the best.
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