Government shutdown delays loan process for home buyers

WILMINGTON, NC (WWAY) — The country is on day 26 of the government shutdown. It continues to plague businesses and employees around the country.

Local real estate markets are also bearing the brunt of the shutdown. Home buyers who need USDA loans could be waiting quite awhile, and they’re not the only ones who could suffer.

“Lenders cannot close and fund until it has the USDA blessing,” said Brad Brown, who is a Mortgage Loan Officer at TowneBank Mortgage.

The government shutdown is now hurting home buyers.

Brown says, if you need a loan from the USDA, you’ll have to wait even longer to close on a new home.

“We will continue to process and push loans through the system. The only thing we can’t do right now is, once we have all the documentation together – that’s pay stubs banks statements, tax returns – we cannot place the final approval on it and allow closing and funding to go through,” said Brown.

Brown says the loan process is at a complete stand still. He says now, the loans are just piling up at the USDA

“In my case right now, we’ve got the buyer who needs to close so that those sellers can move on and close on the house that they’re under contract on,” said Brown.

Brown says it’s more than just a waiting game. At this point, it has become a total domino effect.

Brown says this is not the first time they have had to deal with the backup. But he says when the government finally opens back up, there could be a backlog in approval process.