Will The Government Shutdown Affect Home Loans?
Home Loans continue through shutdown. The partial government shutdown is not affecting mortgage loans thanks to the Trump administration reviving a program that is crucial to home loans. Otherwise there would have been delays in funding and possible cancellations of loans.
Alerting the Treasury Department, the program’s closure “could harm consumers seeking to obtain a loan” argued the
Mortgage Bankers Association.
At the heart of this crucial Internal Revenue Service program is the verification of a borrower’s income. Lender’s, such as Freddie Mac, Federal Housing Administration and Fannie Mae, must have forms sent to the IRS by the lender. If the forms are not sent, the loans are not accepted for purchase by the
Government backed mortgage entities.
Circumventing a house buying crisis, a Treasury spokeswoman shared that the Trump Administration is “pleased to help taxpayers by ensuring this service continues despite the lapse.”
How Is This IRS Program Being Funded?
The IRS charges a user fee each time it verifies income for a borrower. The administration moved forward with the
program by funding through these fees instead of through the budget. The fees are small, just $2.00 per request, and therefore approximately 400 IRS clerks were allowed to begin working again to continue this verification program.
How many of these requests do you think the clerks process in a week? The number is around 400,000 a week. That’s 400,000 people
a week in pursuit of buying a home.
So rest assured home buyers and sellers. The Trump administration is making sure all the parts of the government are running so that Americans, gay or straight, may still obtain the American Dream of a home.