Government shutdown slows down some home loans

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Reporter - Kendall Downing

WILLIAMSON COUNTY, Ill./ MARSHALL COUNTY, Ky. - Right now the U.S. government shutdown's putting some first-time home-buyers on hold.

With the U.S. Department of Agriculture closed, gone are the processors for rural development home loans.

A house in Marshall County is on track to be Megan and Justin Pitman's new home.

"We were extremely excited to be in our first home." said Megan Pitman.

Problem is, the young couple's offer got accepted the Friday before the government closed for business. That means their loan through the USDA can't be processed.

"We found out that the government was shutdown, and everything stopped," said Pitman.

Richard Davis is managing broker of Century 21 House of Realty in Southern Illinois.

"We're just really sitting on our hands waiting for the government to be back up and running," he said.

He said if lenders already have commitments from the USDA, those loans can proceed. New business is what's held up.

"The ones that we wanted to get started are now not going to be able to get started," he said.

Davis points out that rural development loans are common in this region. They require limited down payments and appeal to homeowners with lower incomes.

He said the effects of the shutdown will increase as the days tick by.

"The longer it does go unresolved, the more of an impact it will have on our industry. More buyers will be sitting there waiting, unable to conduct new business, and that's when the slowdown will take place," he said.

Megan Pitman wants to make the house she found her home, but Congress has to settle its business first.

"Stuck waiting until the government opens back up," she said.

Funding for USDA programs is also tied up in the Farm Bill. Congress hasn't passed a new version of it yet.

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