What Government Shutdown Means for REALTORS®
LOUISIANA REALTORS • January 8, 2019
As produced and published by the National Association of REALTORS® as of January 8, 2019
As of midnight on December 21, 2018, the President and Congress were unable to agree on the provisions of a Continuing Resolution (CR) to fund the federal government. As a result, a partial shutdown of some government operations has occurred. This partial shutdown includes some federal housing, mortgage and other programs of interest to the real estate industry. A summary of the impact on selected agencies is provided below. While this is a very politically dynamic event, NAR staff continue to monitor federal agencies and work with Congress, the Administration and other groups to assess ongoing impacts to NAR members and their businesses.
ENVIRONMENTAL PROTECTION AGENCY
CONTACT US
Under EPA's shutdown plan, most employees are now furloughed. This will affect various regulatory programs and compliance activities, such as wetlands determinations under the 404 program and enforcement of the lead-based paint disclosure and renovation, repair and painting programs.
FEDERAL HOUSING ADMINISTRATION
HUD’s Contingency Plan states that FHA will endorse new loans in the Single Family Mortgage Loan Program except for HECM loans. It will not make new commitments in the Multi-family Program during the shutdown. FHA will maintain operational activities including paying claims and collecting premiums. FHA Contractors managing the REO/HUD Homes portfolio can continue to operate. Some delays with FHA processing may occur due to short staffing (click here
for more info).
GOVERNMENT SPONSORED ENTERPRISES (GSES)
During previous shutdowns, Fannie Mae and Freddie Mac have continued normal operations since they are not reliant on appropriated funds. On December 26th both GSEs updated or clarified their loan purchase requirements in case of a shutdown. Freddie Mac requires all borrowers to sign a 4506T request form prior to close, but the request does not have to be processed prior to close. Fannie Mae requires the same unless the borrower’s income can be verified though Fannie Mae’s proprietary Desktop Underwriter verification system in which case no 4506T is required.
INTERNAL REVENUE SERVICE
The IRS will close and suspend the processing of all forms, including requests for tax return transcripts (Form 4506T). While FHA and VA do not require these transcripts, they are required by many lenders for many kinds of loans, including FHA and VA. Delays can be expected if the shutdown continues. Some loan originators may adopt revised policies during the shutdown, such as allowing for processing and closings with income verification to follow, as long as the borrower has signed a Form 4506T requesting IRS tax transcripts. On loans requiring a Form 4506T, see the GSE section above for additional details.
NATIONAL FLOOD INSURANCE PROGRAM (NFIP)
After NFIP operations were initially suspended over questions raised by government attorneys, NAR worked with the White House and Congress to clarify that the government shutdown does not affect the sale or renewal of flood insurance policies or the payment of claims on existing policies. Disaster relief, airport screenings and other essential homeland security functions are unaffected. Click here for the FEMA release resuming the full and normal operations of the NFIP.
RURAL HOUSING PROGRAMS
The U.S. Department of Agriculture will not issue new rural housing Direct Loans or Guaranteed Loans. Scheduled closings of Direct Loans will not occur. Scheduled closings of Guaranteed Loans without the guarantee previously issued will be closed at the lender’s own risk.
VISA PROGRAMS - EB-5 AND H-2B
Until the shutdown ends and the Regional Center EB-5 program extension is signed into law, the EB-5 Immigrant Investor Regional Center Program is suspended and no new I-526 petitions can be filed. Investors must continue to file timely responses to USCIS Requests for Evidence (RFE) and Notices of Intent to Deny (NOID). In addition, investors may continue to prepare and file I-829 petitions. While the Department of Labor was funded for 2019, the Department of Homeland Security was not. Therefore, while the H-2B Temporary Worker Visa program is still operational for workers currently in the U.S., the DHS is unable to approve any new or returning workers under an H-2B visa.
FEDERAL GOVERNMENT SHUTDOWN SURVEY
An NAR survey
of 2,211 members found 75 percent had no impact to their contract signings or closings. However, 11 percent did report an impact on current clients and 11 percent on potential clients. If respondents reported an impact on current or potential clients, they were asked further details. Respondents were allowed to pick more than one response, as they may be working with more than one client. The most common impact, at 25 percent, was the buyer decided not to buy due to general economic uncertainty, though they were not a federal government employee. Among those impacted by the shutdown, 17 percent had a closing delay because of a USDA loan.
Want Your Teen to Own a Home Someday? Start Talking Money Now Teens may not be thinking about mortgage rates or down payments just yet, but the money habits they’re building now can follow them for years. And 88% of teens surveyed by Fannie Mae and Junior Achievement said they want to own a home someday. This week’s Consumer Guide: Talk to Your Teens About Money and Homeownership makes those conversations a little easier, covering everything from credit scores and budgeting to debt, renting versus owning and saving for that eventual down payment. So yes, you may have to interrupt the doomscrolling. But helping teens get smarter about money today could put them in a much better position to get the keys to a home of their own down the road. Download all of NAR’s Consumer Guides in English or Spanish at facts.realtor. For ease of reference, below is a list of the most recent guides: NEW: Teen Financial Literacy Fraud Red Flags Helping Family Members Become Homeowners Prepare Your Home for Hurricane Season Condominium Insurance Thank you for your continued engagement with the “Consumer Guide” series and for sharing the resources with prospective clients to ensure they have the information they need to find success in their home buying or selling journey. Remember that these guides are for informational purposes only and are not meant to enact or change any existing NAR policy. The next Consumer Guide, scheduled for publication on Oct. 21, will cover winter cold and storm preparedness.
Homeownership Is on Louisiana's November Ballot
After months of gathering recipes from across our Louisiana REALTORS® family, the cookbook is ready! This 200+ page collection is filled with Louisiana flavor, REALTOR® heart and recipes contributed by our members. We launched sales of the cookbook at the Fall Governance Meetings. You can now purchase your copy for $30 directly from the printer and shipped to you! Additionally, we will have copies available at the RRF booth at NXT . After NXT, we will carry a limited stock at the LR office for you to purchase through the LR Merch Shop and pick-up from the office or at an LR event, as stock is available. Even better, $15 from every cookbook sold will be donated to the REALTORS® Relief Foundation (RRF) to help provide housing-related assistance to REALTORS® and their families following disasters. Pick up a copy for yourself, grab one as a gift and enjoy a taste of Louisiana while supporting a great cause!
