Government shutdown stalling home buyers' ability to close on property sales

The United States Department of Agriculture is closed as part of the partial government shutdown. This is preventing mortgage lenders from getting 'loan commitments' from the USDA for rural development home loans. (MGN Online)

A representative with a mid-Missouri home loan agency said Tuesday the government shutdown is affecting some home buyers' ability to close on their property sales.

Flat Branch Home Loans Area Sales Manager Scott Batt said the United States Department of Agriculture is closed currently as part of the partial government shutdown. The federal agency offers 100 percent home loans to buyers for homes in areas deemed 'rural.'

Batt said the USDA offers this program is an effort to build rural communities and grow economic strength. The loans also offer home buyers to have a very small credit score when purchasing a home.

When a home loan agency, such as Flat Branch, approves a loan, they send the paperwork off to the USDA. The next step is for the federal agency to give what's known as a 'conditional loan commitment.' This is the USDA's way of giving their seal of approval on the loan.

However, with the government shutdown, the agency cannot give out loan commitments. Batt said every loan he currently has that is 'in-process' cannot be finished, those buyers cannot close on their homes. Flat Branch is one of the largest USDA lenders in the state of Missouri, so Blatt said this is a difficult situation to navigate.

"We cannot send files in," Batt said. "Once we do open back up, and the government opens back, then there's going to be a backlog because then every lender is going to be trying to get those conditional commitments, so even when it does open up it's still going to be causing delays."

Each home loan has what's called a 'rate lock expiration.' Essentially, the rate buyers are offered on the loan is only good for a certain amount of time. Loan officers are now tasked with meeting their borrowers in the middle and trying to keep a good rate, but also not knowing when the USDA will be able to provide a loan commitment.

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