by Myles Biggs
The Federal Reserve
Whether you’re channel surfing on your television, logging
on to your favorite news websites or opening up your daily newspaper, news
surrounding the recent government shutdown is everywhere. When it comes to how
this shutdown will affect the housing markets, there are certain facts to consider.
Although the name ‘Federal’ Reserve leads many to believe
that this is a government organization, it is actually a private entity. As
such, the Federal Reserve does not rely on Congress for their funding and will
be able to keep their discount programs open. The Federal Reserve will also be
able to supply other banking institutions with the funds necessary to stay open
and continue lending.
This is a positive point for the housing market.
Fannie & Freddie
Mortgages controlled by Fannie Mae and Freddie Mac will not
be affected by the government shutdown. While some delays are expected
throughout the approval processes, these mortgages are funded through lender
fees instead of federal funding.
FHA & VA Loans
While delays can be expected because of fewer active
employees, the Federal Housing Administration (FHA) will continue to endorse
new, single-family mortgage loans. The Veteran Affairs (VA) Home Loans will
also continue to be processed and guaranteed.
For the short term, the United States housing market will work through these bureaucratic delays and continue to function. At Ritz-Craft we are
confident that our operations will remain uninterrupted during this government shutdown.