When the government shuts its doors because of a funding brouhaha that pits the White House against Capitol Hill, who gets hit hardest among people needing a home mortgage? The latest version of federal breakdown made one fact painfully clear: It all depends on the type of loan you seek and where you’re located.
Worst hit, of course, have been the thousands of federal employees who’ve been furloughed, gone unpaid and had no assurances about when the financial uncertainty might end.
But what about others? Here’s a quick overview:
If you’d been hoping to buy or refinance a house during the past couple of weeks with a conventional loan — a mortgage eligible for purchase by dominant investors Fannie Mae and Freddie Mac — your application or closing probably sailed through with few if any hitches, according to Pete Mills, a senior vice president for the Mortgage Bankers Association.
Though Fannie and Freddie operate under federal government conservatorship and use federal guarantees, they are not government agencies, and they’ve conducted business as usual. To the extent that they’ve been touched by the shutdown — such as through the nonavailability of tax return transcripts the IRS routinely provides lenders to verify applicants’ incomes — both companies have adopted work-arounds to keep the loans flowing.
