Are VA Home Loans Available During the Government Shutdown?
Many service members and Veterans are wondering today if they can get a VA home loan while the government is shut down.
Fortunately, VA home loans are not funded by the tax payer or with government funds. VA loans are made possible by the VA funding fee, usually between 2.15 and 3.3% of the loan amount. This fee is paid for by the Veteran when the home is purchased.
That being said, federal employees are needed to run day-to-day operations at the Department of Veterans Affairs. Yet at this time, it appears all functions of the VA Home Loan Guaranty Program are up and running.
According the homepage of the Veterans Information Portal (VIP), “The VA Home Loan Guaranty Program will continue to function as normal in the event of a Government shutdown.”
In addition, VA Circular 26-13-20 states that VA-approved lenders can continue to request Certificates of Eligibility (COEs), appraisals, and other vital items through regular channels.
And, since VA-approved lenders are not affiliated to the government, they are open for business. The VA merely guarantees that lenders will be repaid if a VA loan defaults. VA home loan lenders are private companies and will continue their services.
IRS and Social Security Verifications
Where you may run into trouble, however, is if your lender needs income tax verifications from the IRS or a verification from the Social Security Administration to verify your social security number. Since federal employees are needed to process these verifications and get them to the lenders, your VA home loan purchase or refinance application may be stalled.
At this time we don’t know how long the shutdown will last, or if the VA Home Loan Guaranty Program will keep its employees on full time in the event of an extended shutdown. We also don’t know if lenders will start closing VA home loans without IRS and Social Security verifications in the event of an extended shut down.
But at least for now it appears there are no furloughs for VA home loan department federal employees. We will keep you updated as news breaks.