What does the government shutdown mean for the housing market?

by Myles Biggs

The Federal Reserve

Whether you’re channel surfing on your television, logging on to your favorite news websites or opening up your daily newspaper, news surrounding the recent government shutdown is everywhere. When it comes to how this shutdown will affect the housing markets, there are certain facts to consider.

Although the name ‘Federal’ Reserve leads many to believe that this is a government organization, it is actually a private entity. As such, the Federal Reserve does not rely on Congress for their funding and will be able to keep their discount programs open. The Federal Reserve will also be able to supply other banking institutions with the funds necessary to stay open and continue lending.

This is a positive point for the housing market.

Fannie & Freddie

Mortgages controlled by Fannie Mae and Freddie Mac will not be affected by the government shutdown. While some delays are expected throughout the approval processes, these mortgages are funded through lender fees instead of federal funding.

FHA & VA Loans

While delays can be expected because of fewer active employees, the Federal Housing Administration (FHA) will continue to endorse new, single-family mortgage loans. The Veteran Affairs (VA) Home Loans will also continue to be processed and guaranteed.

Moving Forward

For the short term, the United States housing market will work through these bureaucratic delays and continue to function. At Ritz-Craft we are confident that our operations will remain uninterrupted during this government shutdown.