With the current government shutdown, the rural development program run by the USDA has also been furloughed as well. This has been a major blow to business as homebuyers relying on those loans to close on time have had to essentially play a waiting game until the USDA re-opens for business. While it has been a major inconvenience for most homebuyers, the shutdown of RD has literally cost one of my clients close to $10,000 out-of-pocket in order to prevent being homeless next week.
The story goes like this: my client has a beautiful 8-acre property under contract in Central, LA for an incredible price. The plan was to get a RD 100% loan for the property and then use the proceeds from the sale of his home to build an addition for his family of 7 to live comfortably. The catch here is that we closed on his current home two weeks ago and negotiated occupancy after closing until the 17th of October, the same day we close on his new home. The shutdown of the government and USDA, though, has stopped all loan processing and thus leaving my client and his family facing the prospect of being homeless on the 17th since the now-current owners of the home need to move in.
The only solution left to my client in order to close by October 17th is to switch to a higher cost FHA loan. What looked to be a $0 out-of-pocket deal has turned into roughly a $10,000 transaction in which he now has to pay the 3.5% down payment, FHA’s fees, AND a much higher monthly PMI payment. Ultimately this will significantly delay the addition to the home since he will not have all the cash to complete it, leaving his 5 children to bunk together in 2 bedrooms instead of each having their own as he promised them. Until they save all that money again, they will never be able to enjoy the future they envisioned would be theirs by the end of the year. Where my buyers were once excited and gracious has been turned into an inconvenient and costly situation – one that will be hard to forget.
This is a travesty caused by our very elected officials whom we as a country have chosen to represent our interests. I am sure this is just one of many examples around the country of the hardship and costliness this shutdown has had on ordinary Americans. Congress and the president’s inability to do their fundamental jobs – compromise – is hurting the very lives of the people they were elected to compromise for. I pray for a swift conclusion to this mess, and also for the collective conscience to re-examine what we really desire in our elected officials. I have a feeling that this is not it.