Closings & Delays across the Tennessee Valley

Government shutdown could affect some mortgage applications

HUNTSVILLE, Ala. - The government shutdown now in its third week. More and more people are finding out it will have an effect on their lives, especially if they want to buy a home.

While some people might be looking for those government-backed homes to pull off their dreams, it might take a little longer for certain mortgages to be approved right now.

The government shutdown has put delays on both FHA and VA loans. The government is still issuing these loans, but there is a delayed response says Cindi Peters-Tanner, Huntsville Area Association of Realtors President.

Peters-Tanner says the type of loan that will have the most hang-ups amid the shut down is USDA loans.

“There is a type of loan called USDA and that's 100% financing. It’s very popular in our market and those have stopped. They are not issuing any kind of USDA loans until the government reopens and then there will be a backlog," says Peters-Tanner.

In some markets, houses don’t stay listed for long. If you’re worried about letting your dream home sit on the market because you can’t get a federally backed loan, Peters-Tanner says there are other options.

"There’s a couple different types of loans out there. It’s not just government-backed loans. There are conventional loans as well." Peters-Tanner continued, "Chances are if they’re ready to buy they’ve already spoken with a realtor, they’ve already spoken with a lender and they are pre-approved.”

Peters-Tanner says there is probably going to be a backlog on some of the loans. "There are some people who are ready to buy right now and there's going to be a little bit of a carryover. So you’ll see a little bit of a delay and then all of a sudden a bunch of closings.”

North Alabama had over 14,000 homes sold in 2018. Despite the current government shut down, local realtors are confident 2019 will still be a robust year.