A drive through the Cave Spring part of Roanoke County shows neighborhoods dotted with for sale signs in front yards. The real estate market is slowly making a comeback. David Henry is the Regional Director for Atlantic Bay Mortgage Group and says the government shutdown isn't helping the Roanoke Valley market recover.
He says, "Any delays or hiccups we have in the mortgage business and real estate business certainly doesn't help us grow."
We found the government shutdown has put all USDA loans on hold. USDA loans are often good options for first time home buyers because no money is required as a down payment on the purchase.
Some areas qualify and some don't. Guidelines changed October 1st but right now there is no way to see who does and doesn't qualify because the web site is also shut down. When you try to log on to the USDA web site, users get a notification that reads, "Due to the lapse in federal government funding, this web site is not available. "
Another real estate effect for local lenders is the fact that they can't get tax transcript information from the I.R.S. to verify household income for clients. Also, there is no way to verify tax payments from a borrower.
Atlantic Bay Mortgage Group and some other lenders are closing loans without documentation that's normally required. Those groups will then collect that information once the government begins normal operation.
Henry says, "We are doing that to help clients get into the homes. There is not a tremendous risk, but it does put some additional risk on the lenders out there."
Even if you aren't buying or selling a home the shutdown has the potential to impact all homeowners.
Henry adds, "Even if you aren't looking to buy or sell your home you are still worried about the value of your home."
We've learned that if home sales are slow, property values may go down which leads to less money being paid for property taxes. The shutdown may create a cycle that eventually affects everyone.
Henry says, "It really has a big impact both to the government and to the private sector."