The Shutdown Is Over, But the Wait Isn't: Navigating Federal Loan Delays in San Diego

The recent 43-day government shutdown may be over, but for many San Diego homebuyers, the frustration is just beginning. As a recent Realtor.com article, "What Happens to My Federal Loans Now that the Government Shutdown Is Over?" explains, the ripple effects of the shutdown are causing significant delays in the processing of FHA, VA, and USDA loans. For a city with a large military population and many first-time buyers who rely on these programs, this backlog is creating a major headache for the local real estate market.

During the shutdown, many federal agencies were operating with skeleton crews, leading to a massive pileup of loan applications. Now that the government is back open, these agencies are facing the daunting task of working through a 43-day backlog. Experts predict it could take three to four weeks, or even longer, for processing times to return to normal. This means that buyers who are using FHA or VA loans to purchase a home may face unexpected delays in their closing dates.

This is particularly concerning for our military community in San Diego. VA loans are a critical tool for service members and their families to achieve the dream of homeownership. These delays can add a tremendous amount of stress to an already challenging process, especially for families who are relocating on a tight timeline. A delayed closing can mean extra hotel bills, storage fees, and the uncertainty of not knowing when you can move into your new home.

So, what can you do if you are in the process of buying a home with a federal loan?

For Buyers: The most important thing you can do is be patient and stay in close communication with your lender and your real estate agent. Build extra time into your home buying timeline and be prepared for potential delays. Make sure you have submitted all of your paperwork correctly and respond quickly to any requests for additional information. If you have a rate lock that is set to expire, talk to your lender about an extension. While the situation is frustrating, it is temporary. The agencies are working hard to clear the backlog, and with a little extra patience, you will get to the closing table.

For Sellers: If you have accepted an offer from a buyer who is using an FHA or VA loan, it is important to be flexible. Understand that any delays are not the fault of the buyer, but are a result of the government shutdown. Work with your agent to stay informed about the progress of the buyer’s loan and be prepared to negotiate a later closing date if necessary. A little bit of understanding and flexibility can go a long way toward ensuring a smooth transaction for everyone involved.

The government shutdown may be a distant memory for some, but for those in the midst of a real estate transaction, its impact is still being felt every day. The good news is that this is a temporary problem. The backlogs will be cleared, and processing times will return to normal. In the meantime, the best advice is to be prepared, be patient, and work with an experienced team of professionals who can help you navigate the challenges. If you have questions about how these delays might affect your home purchase or sale, please do not hesitate to reach out. We are here to help you every step of the way. Visit our website for more information.

This blog post is an analysis of the article "What Happens to My Federal Loans Now that the Government Shutdown Is Over?" published by Realtor.com.