How will the government shutdown be affecting the Scottsdale real estate market?
Not much, if at all, assures the U.S. Department of Housing and Urban Development (HUD). Originally, the agency reported that any loans backed by the Federal Housing Administration (FHA) would not be processed for the duration of the government shutdown. More recently, however, the HUD stated that all FHA-insured single-family loan applications would continue to be processed, though more slowly. This is relatively good news for any home buyers looking to secure a loan through the FHA.
In 2012, nearly half of all mortgages were endorsed by the FHA. Currently, FHA-endorsed loans constitute around 15 percent of all mortgages. FHA loans differ from other government-backed loans (those endorsed by Fannie Mae or Freddie Mac) in that they have much more flexible requirements for down payments, credit scores, and income. FHA loans allow down payments as low as 3.5 percent of the selling price, compared to the ordinary amount of 20 percent. Many first-time homebuyers lack an alternative to FHA-backed loans and would be largely affected if there were an FHA freeze, as would the overall recovery of the housing market.
Reductions in staff and furloughs caused by the government shutdown means that the single-family aspect of the FHA will operate more slowly. As long as the government shutdown is brief, however, this should have no major effect on the market’s recovery. In the case of a long-term government shutdown, a drop in home sales could reverse the market’s upturn.
To find additional information on the Scottsdale market, visit our page on Current Market Trends. Feel free to contact me at (602) 791-0536 or at Carmen@TopScottsdaleHomes.com if you wish to view any Scottsdale homes.
Carmen Brodeur JD
Trillium Properties, LLC
9825 E Bell Road, Suite 120, Scottsdale AZ 85260