While some mortgage professionals say it’s business as usual for them through the government shutdown, at least one group of borrowers is being left out in the cold. Those seeking Department of Agriculture loans for rural properties are out of luck until the shutdown ends.
“The big thing (the shutdown) is affecting is that if you’re doing USDA loans, the USDA process is pretty much completely shut down at this point,” United Wholesale Mortgage President Matt Ishbia said Monday.
The USDA loan program provides financing for home purchases or refinancing in USDA-designated rural areas. The loans, backed by the USDA, are serviced by direct lenders. The program includes the option to finance 100% of a home’s purchase price.
But now those applying for USDA loans find themselves in limbo. The USDA has gone almost entirely dark since the government shut down last week; the agency’s web address currently redirects to a page stating that the website is temporarily offline “due to a lapse in federal funding.”
The agency’s shutdown contingency plan, posted on the White House website, states that although the agency will continue “balancing and reconciling” existing loans, “no new (rural development) housing loans or guarantees (will) be issued.”
The contingency plan also warns that a shutdown lasting more than two weeks could have “an immense adverse impact on the rural economy.”
“A more permanent interruption in the program would cause a substantial reduction in housing available in rural areas relative to population,” the plan stated.