What homebuyers need to know about federal housing loans now that government shutdown is over

Now that the longest government shutdown is over, it’s back to business for the housing market, but don’t expect services to get back to normal overnight.Homebuyers and homeowners who are hoping to secure certain types of mortgages will still need to practice patience.For those applying for a government-backed mortgage, it’s important to note that federal housing programs did not cease completely during the shutdown, but many agencies were slow to process applications.Among the government loans affected were Federal Housing Administration (FHA), Veterans Affairs (VA), and USDA loans.The government shutdown started on Oct.

1, and key housing and mortgage programs were operating at limited capacity—some working with reduced staffing or paused altogether.This left buyers in limbo and sellers waiting.Members “from across the country have reported stalled FHA, VA, and USDA loans, as well as halted new flood insurance policies, creating real economic harm that rippled through local economies each day the shutdown continued,” Shannon McGahn, chief advocacy officer and executive vice president of the National Association of Realtors, said in a press release.“There is a six-week backlog with many of these programs, so I would expect there to be some additional delays as they work through them.”If you’re waiting on your application to be processed or you’re ready to apply for a federal loan, just remember it will still take a little longer than normal.“Borrowers beginning or in process for FHA or VA financing should be prepared for a lengthy process, especially as we enter the holiday season,” Brian Shahwan, vice president, mortgage banker, and broker at William Raveis Mortgage, tells Realtor.com.

“While there can be many benefits for going the FHA or VA route, speed is not necessarily one of them right now.”Shahwan says he has seen an uptick in buyers reaching out for pre-approval letters and to get an update on the overall market.“I ...