Happy Holidays, the Government is Still Shut Down
Industry Update
December 26, 2018
Source: HousingWire
The government partially shut down after Congress and the president failed to pass a new funding bill Friday, and now, five days later, that shutdown continues.
Before leaving for the holidays, Congress did not pass a spending bill that included the president’s requested $5 billion in funding for a border wall, and President Donald Trump refused to sign any bill that did not include that funding.
Now, Congress is back in session and will once again begin trying to negotiate a spending bill. However, neither side seems ready to budge on the issue, meaning the government shutdown may have only just begun.
While about 75% of the government is already funded, this partial shutdown does limit part of the housing industry. For example, the U.S. Department of Housing and Urban Development would be unable to process new housing voucher requests.
The shutdown would also have an impact on the U.S. Department of Agriculture. The department would be unable to originate new loans or service existing loans. The department explained that an extended shutdown could have significant effects on homebuyers, homeowners and the economy.
“The shut-down of RD loan and grant making activities for a prolonged period of more than two weeks would have an adverse impact on the rural economy,” the Rural Development department stated. “Should RD not be allowed to continue loan and grant making operations for an extended period, the long-term impact would be substantially more serious.”
While the Federal Housing Administration will remain operational, it will furlough non-essential employees. This means FHA loans could experience a delay during the government shutdown.
And for the same reason, the furloughs of non-essential employees, lenders could also face delays for any transactions that need taxpayer information from the Internal Revenue Service.
The latest National Flood Insurance Program extension was also wrapped into the spending bill, which means it also expired Saturday. The NFIP can now no longer sell or renew policies, while existing policies will remain in effect until their expiration date.
However, the U.S. Department of Veterans Affairs announced it would continue its operations and would not be affected by the shutdown.
“Thanks to the leadership of President Trump and Congress, VA is fully funded for fiscal year 2019, and in the event of a partial government shutdown, all VA operations will continue unimpeded,” VA Secretary Robert Wilkie stated. “We thank the president and Congress for their commitment to our nation’s heroes in funding VA, and stand ready to provide all of the VA benefits and services our veterans have earned.”
Fannie Mae and Freddie Mac, which are not funded by the government, will also remain open during the shutdown.
