Can You Purchase Your Home During the Government Shutdown?
If you are in the process of purchasing your home and are worried about the government shutdown, recent news from Freddie Mac may have you sleeping a little better.
The announcement, effective October 8, 2013, allows lenders to use signed federal tax returns as income verification rather than a tax transcript for loans, loan modifications, and certain other home loan programs.
Asking lenders nationwide to “minimize disruptions” in a recent bulletin about the shutdown, Dave Lowman, Executive Vice President, of Single-Family Business at Freddie Mac said, "We're issuing this guidance to help ensure the continued smooth operation of the mortgage market during the temporary shutdown of the federal government.”
“Today's bulletin [issued October 7, 2013] is intended to give lenders the certainty to continue approving and delivering new mortgages that meet Freddie Mac guidelines to eligible borrowers, such as federal employees and contractors, during the temporary shutdown,” he explained. This news should comfort many potential homeowners affected by the government shutdown, in public and private employment, who temporarily find themselves without an income.
Lowman also reiterated the presence of forbearance provisions, which can be made available for a time period of three to twelve months to qualifying borrowers. “We are also reminding servicers of our forbearance options to assist qualified homeowners with Freddie Mac mortgages,” he added, “to minimize the shutdown's impact on our nation's families and communities."
Find out more about how the temporary government shutdown may affect your home ownership by clicking here.