October 17, 2013
The government shutdown is over, following votes in the House and the Senate on Wednesday and a signature by the President immediately following. But one thing overlooked by some during the shutdown crisis–FHA home loans did continue as normal during the crisis, even if some borrowers who needed IRS confirmation of certain tax documentation did experience some inconvenience while that issue was being sorted out.
The IRS was a casualty of the shutdown, with only a small percentage of its work force available for duty under the partial shutdown. In other sectors, government buildings sometimes closed to the public but kept operating for behind-the-scenes work. But overall, FHA loans kept moving forward during the entire length of the shutdown.
The reason we write about that here is because while the shutdown and the government debt ceiling crisis has been resolved for now, it has not been resolved “once and for all”. This entire set of issues will be revisited again in early 2014. Will we see a repeat of this shutdown crisis next year? It’s impossible to say, but borrowers should be reminded that if the same conditions and circumstances once again result in a similar kind of partial shutdown, it’s not unreasonable to expect the same conditions for FHA loans.
That is to say, FHA loans would still be available in spite of a partial shutdown such as the one we’ve just experienced.
Some borrowers who depended on social security and other government pay worried that if the debt ceiling deadline came and went without a resolution, it could result in problems making FHA mortgage payments. That is a valid concern, and any borrower who found themselves struggling to make a mortgage payment is strongly encouraged to work closely with the FHA lender to avoid loan default.
The FHA and HUD had issued requests to participating lenders for leniency during the partial shutdown–borrowers affected by this crisis should be proactive and work with the lender as soon as financial difficulty is known. Doing so keeps the widest range of options open. Borrowers who wait until payments are missed and the loan is in danger of default may have fewer options available to them as a result.
Do you have questions about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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