The government shutdown is obviously not good for the Pioneer Valley real estate market recovery. Although this will have a minimal effect on government real estate programs that guarantee most mortgages in the short term, it does have an effect on consumer confidence. If home buyers are nervous, they are less likely to buy a home.
The Chief Economist of the National Association of REALTORS® told Forbes Magazine: “Administratively everything should keep moving along, but it’s more about the confidence of consumers and whether they perceive that the government shutdown could lead to a recession.”
Therefore, it seems that the best thing that a home buyer can do is not let the shutdown get to them. As Franklin Delano Roosevelt once said, “All we have to fear is fear itself”.
Fannie Mae and Freddie Mac and their regulator, the Federal Housing Finance Administration, do not rely on appropriated funds. Lender fees pay for their operations. VA loans, which are administered through the Department of Veterans Affairs, will also be unaffected because they are funded by user fees.
Because the FEMA flood insurance program is funded through premiums, it will also not be affected
However, some programs will be adversely affected. While the Federal Housing Administration (FHA) will endorse new single-family mortgage applications, for example, it will not do so for multi-family properties.
The USDA loan will not be issued during the shutdown, as well. The USDA loan is popular because it offers 100% financing in rural areas. The Pioneer Valley has numerous rural areas that qualify for this type of loan.
Let’s just hope that Congress gets it together and puts the country before themselves and not let this shutdown last.
If you are planning on buying or selling a home in the Pioneer Valley, make your first call to Michael Seward at 413-531-7129. Michael Seward is a Certified Residential Specialist, a Certified Buyers Agent, A Certified Loss Mitigation Specialist, a Certified New Homes Specialist, and Green designee of the National Association of REALTORS®.