Government Shutdown Looms Over Real-Estate

Government Shutdown Looms Over Real-Estate

Residents buying homes with a federal loan will face a backlog.
Some Northeast Indiana and Northwest Ohio residents looking for the American dream of owning their own home have not been put on hold as a direct result of the showdown in DC.

One person buying a new home, who has applied for a federal loan now has their American dream put on hold but this doesn't just affect that one home buyer.  The shutdown in DC has a domino effect on buyers, sellers, and real estate agents.

"I pay extra every month on my rent, plus I haven't taken my stuff out of a storage unit so I pay extra storage too waiting for my home to open up," said Renee Shutte, a prospective home buyer.

The USDA provides loans to homes in rural areas.  Shutte qualified for a USDA loan on a property she eyed near Leo-Cedarville. Shutte's problems began with tis federal program months ago and now thanks to the shutdown, her loan process is now at a virtual standstill.

"The government has been trying to down size so that was probably the first glitch," she said.

Shutte says thanks to the downsizing, she had to move into an apartment and rent month to month.

"We realized how many people this was putting me behind," said Shutte.

Because of this hold, the person Renee is buying her home from (Seller A), can't move forward with their sale. (Seller A) is also buying a home that is currently empty because the homeowner (Seller B), has already moved into their new property. Which brings us to Adam Smith at Cowell Banker. He represents (Seller B).

"We were just right there at the finish line to get it closed and then the government shut down so they haven't been approved yet," said Smith.

Until Shutte can get her USDA loan approved, all parties involved are on hold.

"With the shutdown, I guess my big fear is they were back logged already, with the shutdown depending on how long this takes could backlog them even farther," said Smith.

"We though what was going to be maybe a month, two, three at most has turned into almost a 6 months process," said Shutte.

Not only does this affect home buyers, sellers, and agents who are involved with federal loans but it also effects other organizations including inspectors, title and escrow companies, and loan officers in the real estate business. 

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