There's been a lot of confusion and uncertainty about how a government shutdown will affect VA home loans.
The good news is there have been minimal impacts on VA lending during the 2018-2019 government shutdown. Lenders can still order appraisals, obtain a borrower's Certificate of Eligibility, submit the VA Funding Fee and more.
Some lenders have reported issues obtaining documentation or verifications for prospective borrowers. We’ve been able to troubleshoot issues with the VA and other stakeholders and find solutions to keep our veteran borrowers on track.
The loan program continues to guaranty loans, and many lenders, including Veterans United, are closing loans without issue.
The story is similar with FHA loans, which haven't experienced major widespread impacts from the shutdown. But every buyer's situation is different.
The Department of Housing and Urban Development has closed its regional and field offices with limited exceptions during the shutdown, and that means borrowers with unique situations that require a closer look from HUD could experience delays.
The FHA's condo approval process is also on hold during the shutdown.
Conventional lending has experienced minimal impacts because of the shutdown, in part because these loans aren't backed by the government.
But USDA borrowers have been significantly impacted. The Rural Development program isn't guaranteeing any loans during the shutdown. Depending on how long it continues, some buyers might see deals fall through, with potential ripple effects for those already under contract to sell their current home.
The Loan Guaranty program is one of many programs and services the VA says will not be impacted by a shutdown.
“VA is fully funded for fiscal year 2019, and in the event of a partial government shutdown, all VA operations will continue unimpeded," VA Secretary Robert Wilkie said in a statement. "We thank the president and Congress for their commitment to our nation’s heroes in funding VA, and stand ready to provide all of the VA benefits and services our veterans have earned.”
A prolonged shutdown could make it difficult for some VA homeowners to stay current on their mortgage.
The VA is encouraging lenders and servicers to extend forbearance to homeowners in distress because of the shutdown.
They’re also encouraging mortgage servicers to waive fees and penalties for late mortgage payments and to suspend credit reporting to the credit bureaus. Even just one 30-day late mortgage can take a toll on consumer credit.
Talk with your mortgage servicer as soon as possible if you anticipate having problems making your monthly mortgage payment.
Buying a condominium with you VA home loan benefit is a great option. However, there are additional requirements that differ from purchasing a single-family residence or a multiunit complex.
Credit score requirements vary by lender. However, most lenders have similar criteria. Let's look at the minimum credit score for a VA loan and what lenders typically expect.