The Government Shut Down

The current shutdown of the Federal Government has left many homebuyers and real estate industry partners with many questions about how the shutdown will impact their ability to do business. Merrimack Mortgage will continue to operate at full capacity during the shutdown; however, the shutdown creates some challenges for lenders. We hope  you find this piece informative and that you will share it with staff and colleagues, as well as potential homebuyers and sellers.

FHA LOANS                                                                                                                                FHA Single Family Housing –  Government Shutdown FAQs Source: http://www.whitehouse.gov/omb/contingency-plan

Q: How will this impact the housing market? A: Because we are able to endorse loans, we don’t expect the impact on the housing market to be significant, as long as the shutdown is brief. If the shutdown lasts and our commitment authority runs out, we do expect that potential homeowners will be impacted, as well as home sellers and the entire housing market. We could also see a decline in home sales during an extended shutdown period, reversing the trend toward a strengthening market that we’ve been experiencing.

Q: Will FHA have staff available to answer questions if there is a government shutdown? A: Limited FHA staff will be available to respond to questions, emails or other correspondence.

Q: Can I get an FHA case number? A: Yes. Lenders will be able to obtain an FHA case number from the FHA Connection.

Q: Will FHA insure any loans during the government shutdown? A: Yes, FHA will endorse single family loans; however, it may take a little longer to endorse.

Q: Will the Credit Alert Interactive Voice Response System (CAIVRS) be available during a government shutdown? A: Yes. CAIVRS will be available to determine if a borrower has a delinquent federal debt.

Q: Can lenders submit packages for condo approvals? A: No. FHA will not approve condo projects during a government shutdown.

Q: Can lenders file a claim and convey a property if there is a government shutdown? A: Yes. Lenders can file a claim and convey a property. The properties will be assigned to an Asset Manager and listed for sale. Claims will be paid.

Q: Will HUD Homes be listed? A: Yes. FHA’s Asset Managers (AM) will handle the sale of HUD Homes.

Q: Will I be able to place a bid on a HUD-owned property via the HUD Home Bid site during the shutdown? A: Yes. FHA contractors will handle the sale of HUD Homes and the bidding site (www.hud.gov/hudhomes) will be available and maintained during the shutdown.

Q: If I’m selling my home to a buyer utilizing FHA-insured financing will I still be able to complete the sale? A: The shutdown may delay the processing or closing of your FHA-insured loan. Please contact your lender for the exact status of your FHA loan.

VA LOANS

The Department of Veterans Affairs will continue to operate during the government shutdown so there should be no interruption of essential loan functions. We can still obtain VA case numbers, borrower Certificate of Eligibility and order appraisals as normal.  

POTENTIAL PROBLEM AREAS  

RURAL DEVELOPMENT LOANS The government shutdown will create issues for all new Rural Development originations as the USDA will be shutting down all essential functions. The RD GUS automated underwriting system will be unavailable during the shutdown and no local loan analysts will be reviewing loans. Borrowers may want to review secondary options with their loan officer.  

TAX RETURN PROCESSING

As the IRS will be closed during the shutdown, no tax returns transcript will be processed. If a loan requires use of non-salaried income from the tax returns for qualifying purposes such as self employment income or rental income, Merrimack and other lenders may not be able to close without the processed returns to ensure the validity of that income.  

PROPERTIES REQUIRING FLOOD INSURANCE

Merrimack Mortgage will be able to process flood certificates during the shutdown and that will not be a cause for delay. However, a closing will likely be delayed if a property requires flood insurance, as FEMA is shut down and unable to issue flood insurance guarantees.  

BORROWERS FURLOUGHED BY THE GOVERNMENT SHUTDOWN

Any homebuyer or homeowner whose income is used for qualifying on the loan and whose current position has been furloughed without pay, will not be able to close their loan until a verbal verification of employment confirms they are back to work at the same rate of pay. Thank you for your cooperation and patience during this time. Merrimack Mortgage will make every reasonable effort to close loans during this process but in some cases will be limited by the individual situation.

Mortgage rates remain overall flat during this time as government reports are not available in regards to the economy.  The opinion of many, after the shutdown, rates make get the boost they need in order to put our housing market back on track.

For more information, feel free to call me anytime at 978-273-3227.  You can also email me at wnickerson@merrimackmortgage.com

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10 Tips for First Time Homebuyers

1.  Be picky, but don’t be unrealistic.  Your first home may need a little work, some paint, carpet and perhaps some other updates.  Remember, this is your first home and the first step in investing in your future. Don’t avoid a home because it has bright pink walls or ugly floors.  Do avoid a home that may have structural damage such as rotted sills.

2.  Do your homework before you start looking.  Look online, work with a Real Estate Agent and begin the process of what style homes you like, neighborhoods and most important, the price range.

3.  Get your finances in order. Organize your bank accounts by having all of your funds in one or two different accounts.  Review your credit to make sure any and all accounts are up to date.

4.  Don’t wait to get a loan; Get pre-approved.  Call me today, 978-273-3227, get approved ahead of time to make sure you are properly prepared and you are realistically looking in the right price range. This is a free service!

5.  Don’t ask too many people for opinions.  Just because your best friend bought and sold 3 houses, does not make them an expert.  Ask the professionals that do this everyday.

6.  Decide when you could move. Set realistic time frames of how quickly you could move into your new home.  In the case of home purchases, some transactions can happen in as little as 30 days and some can take up to 6 months, you need to be prepared.

7.  Think long-term. Where do you see yourself in 10 years? Are you buying to be in a good school system? Closer to work? Close to the City?  Figure out what is important to you today, will these wants/needs still be important in 10 years?  It’s ok to buy a starter home and then re-evaluate in 5 or so years.  This is an investment and it’s your future.

8.  Don’t let yourself be “House Poor”.  Don’t over buy, your first home does not have to be 5000 square feet. You want to make sure you can still live your life and afford to go out to dinner.

9.  Don’t be naive. If you have never swung a hammer, don’t by a fixer upper. Do your homework on what updates to a home cost before purchasing a home that may need TLC.

10.  Get help from a real estate agent. This is your best resource for your home purchase. To be properly “matched” up, call me as I work with real estate agents all over and can refer you to one that best suits your needs.

Bottom Line:  Being a first time home buyer can be a scary uncertain time in your life, seek help from trained professionals to get the best most up-to-date information.

At Merrimack Mortgage, our mortgage programs are designed to assist the many different needs of each unique individual’s needs.

Call or email me today to find out how I can assist you in financing a new home or refinancing your current one. 

Bill Nickerson NMLS#4194   179 Great Road, Acton MA 01720

Phone: 978-273-3227     Bill’s Email       Bill’s Website