Question by Dee D: I have a FHA loan on a HUD home, will the government shutdown affect my closing?
We are scheduled to close on April 14, 2011. Our home is a HUD home and we have a FHA loan. I heard that all FHA loans will be on hold while the shutdown is in affect. Is that for new applications or does it affect loans that have been approved and ready to close? Will the closing stop because it is a HUD home or can we still close?
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Answer by Woof
Ask your lender.
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It will depend on the lender. Hopefully yours already has your FHA case number. If FHA shuts down any lenders that fund these loans will need to hold the note until the government re-opens and starts distributing funds again. This is considered risky and not all lenders will do so and will post-pone closings.
Speak with your lender directly to find out how they are going to handle this. Fingers crossed they are being pro-active and already have an action plan in place.
It will likely be delayed. The loan is not fully approved until closing, and the HUD offices will be closed, there will not be anyone available to sign the closing papers for the seller.