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Mortgage rates dropped a tiny bit last week, and prospective home buyers are crawling through the woodwork to take advantage of low prices and low rates.

If you don’t have the 20% necessary for a conventional loan, you are probably considering a government backed loan like an FHA.  Under a FHA (Federal Housing Administration) loan, you only need 3.5% of the purchase price as a downpayment and can borrow the remaining 96.5%. You can even get the 3.5% as a gift. FHA secures the loan so lenders love it. Of course, you’re doing this with an approved lender and working with a Realtor that you can trust.

So what happens if the government has a shutdown? First of all, of course, all government employees have a day (or days) off without pay. National Parks and all “non-essential” Federal offices are closed. But how does a shutdown affect the home buyer?

FHA loans must be approved by the Federal Government. If the government shuts down, FHA loan processors will be out on furlough. If your loan is not already approved, the process will be halted until the office reopens.

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