The Department of Veterans Affairs said Thursday the federal government shutdown will not affect home loans for veterans.
But there could be an impact on government-backed FHA loans if the shutdown drags on.
A news release from the VA said the VA Loan Guarantee Program “will continue to operate as normal” during the shutdown. “Lenders and services should continue normal activities.”
VA medical centers, clinics and other health services have advance appropriations for 2014 and will remain open.
“VA strongly believes that a lapse in appropriations should not occur and Congress should fund critical governmental operations,” the VA said in the release.
Also, the VA said it has money available to ensure processing and payments in the compensation, pension, education and vocational rehabilitation programs through October.
“However, in the event of a prolonged shutdown, claims processing and payments in these programs will be suspended when funds are exhausted,” the VA said.
Meanwhile, loans through the Federal Housing Administration (FHA) will continue to be endorsed, with the exception of Home Equity Conversion Mortgages and Title 1 loans during the shutdown, the FHA said.
Because FHA will be able to endorse loans, the agency doesn’t expect the impact on the housing market to be significant — as long as the shutdown ends in a short period of time, the agency said.
“If the shutdown lasts and our commitment authority runs out, we do expect that potential homeowners will be impacted, as well as home sellers and the entire housing market,” the FHA said.
“We could also see a decline in home sales during an extended shutdown period, reversing the trend toward a strengthening market that we’ve been experiencing.”
The FHA said limited staff will be available to respond to questions, emails and correspondences during the shutdown, but lenders will be able to obtain an FHA case number from the FHA Connection.
For more information about FHA activity during the shutdown, all 1-800-225-5342 or email email@example.com.
For more on the VA, go online to www.va.gov.
Jim Carney can be reached at 330-996-3576 or firstname.lastname@example.org.