The government shutdown continued for a third day on Monday after Congress’s failed attempts to pass a spending deal that would fund the government through mid-February.
During a shutdown, the Internal Revenue Service (IRS), Social Security Administration and the Department of Housing and Urban Development (HUD) furlough large swaths of workers, significantly delaying mortgage approval until work resumes.
Banks and private lenders will operate as usual, housing experts told Inman News. But the mortgage applications they approve or deny include tax records and financials requiring certification. Fannie Mae and Freddie Mac, despite being government-sponsored enterprises, are not government agencies — and therefore are not affected.
NAR President Elizabeth Mendenhall emphasized that a long-term shutdown could pose larger problems for the housing market and called on senators to vote in favor of a budget extension Friday.
“The government shutdown will have an impact on real estate transactions should it continue for an extended period of time,” said Mendenhall in a prepared statement. “The National Association urges Congress to come together and reach an agreement to keep the government open and avoid any negative effects on our military, federal employees, housing markets and the economy.”
The overall impact of a shutdown on the economy or housing market, however, will likely be negligible, since mortgage approval would resume eventually, said NAR economists.
