MORE: Federal Budget Showdown
JACKSONVILLE, Fla. -- Home buyers and Realtors selling homes requiring FHA mortgage insurance shouldn't have a problem getting a mortgage loan, if the government shutdown is short.
Hundreds of mortgage loans are processed in Northeast Florida every month, and about a fourth of those are FHA guaranteed loans.
The Federal Housing Administration must review each mortgage's documents and approve mortgage insurance. So what happens to the process if the government shuts down?
"The FHA insures the loans; they don't make the loans," said Dane Leslie, president of the Northeast Florida Realtors Association. "The lenders make the loans so we can still make the loans, then get them insured when the government gets back in business."
While Realtors and mortgage lenders aren't concerned with short-term delays in FHA approvals, they do worry about the effect of a shutdown on the paychecks of military families and
federal employees who have mortgages and rent payments.
For now, home buyers should not be worried, said Leslie.
"There is no reason to panic, absolutely no reason to panic. We can still make FHA loans and then when the government gets up and running, we can insure the loans," said Leslie.
But a long term shutdown of the FHA would likely cause mortgage lenders to hold off on a loan until the FHA is back in business, which would delay closings.
If that happens, it is possible that customers would not qualify for a mortgage for at least a year, which means losing potential customers. The tighter mortgage requirements now in effect would mean someone with recent late payments may be disqualified for a mortgage.
In Jacksonville, home sales increased by 13 percent in February compared to a year ago. More of those sales are foreclosure sales as opposed to traditional sales.
Prices are down overall by more than 12 percent. The median price for a lender-mediated home was down 24 percent from a year ago.
First Coast News