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Government Shutdown Will Slow Many Home Loans
Families looking to buy a home will be affected by the government shutdown. 90 percent of U.S. home loans are backed by the federal government.
Many government-backed loans won't be affected, because they are purchased and secured by Fannie Mae and Freddie Mac. But loans guaranteed by the Federal Housing Administration and Veteran's Administration, and rural development loans would all be affected.
ABC NewsChannel 20 talked to a local mortgage expert to see how it will affect anyone trying to buy or sell a home.
"The FHA will not be underwriting or approving any of the FHA loans, and this actually came from HUD, which is the housing and urban development group that oversees FHA," Mike Pence, Executive Vice President of Bank of Springfield, said.
Pence explained this would be a huge hit to many families whose only option to obtain a home loan is through FHA loans.
Of the types of loans that will not be processed during the shutdown, records show they accounted for about 45 percent of mortgages to buy homes last year.