Home sales and the government shutdown: What buyers and sellers need to know

The longer the government shutdown continues, the more uncertainty could be injected into the process of buying or selling a home. That’s according to Denise Lewis, president of Maryland Realtors, a nonprofit association representing more than 25,000 realtors statewide. “I think this is going to affect buyers and sellers equally,” Lewis told WTOP. Despite concerns about what could happen if the shutdown drags on for a month or longer, Lewis said, “Nothing is coming to a screeching halt.” The first place that buyers and sellers may feel the impact of the federal shutdown is in the process of getting flood insurance, Lewis said. “The National Flood Insurance Program can’t issue new or renewal policies during the shutdown,” Lewis said. However, Lewis said, there’s no need to panic. Realtors are learning about possible workarounds. “We’re contacting insurance companies and finding out how to get the private insurance,” Lewis said. There’s another possibility: “Existing policies that are backed by the National Flood Insurance Program can be transferred to the buyer,” she said, but there are some exceptions. “We’re finding out that it can’t be transferred if it’s in that renewal — like that 30-day, 60-day renewal period,” she said. Some federal loan programs are affected, including USDA loans, which, Lewis said, “are largely paused.” “You can certainly identify that that’s the program you want to use, and probably get your loan officer to give you numbers on what that looks like, but they’re not generating any new USDA loans — or closing them right now — until the shutdown ends,” Lewis said. The Department of Veterans Affairs will continue to guarantee home loans during the shutdown, but according to Maryland Realtors, staffing reductions could delay the processing of those loans. That includes appraisals, approvals and issuing certificates of eligibility. According to Maryland Realtors, if the shutdown lasts for a month, there could be a backlog in loan approvals and the issuance of flood insurance, for example. If the shutdown continues beyond one month, the National Flood Insurance Program funding could run out, and that could delay claim payments. And local governments could see a drop in revenues from transfer taxes and recordation fees. According to Lewis, rural and coastal communities could see the greatest impact. Lewis said the most important thing to do for anyone contemplating — or in the process of selling or buying a home — is to get informed. “Talk to your realtor. … And find out if there’s anything coming down the pike that could affect you,” she said. Source