Federal budget talks could affect mortgages

The potential shutdown of the federal government could have a number of impacts across the country. However, one side effect of a shutdown could make it tougher for those looking at Houston properties.

Many first-time homebuyers take advantage of the Federal Housing Administration's low down payment loan programs to buy a house. But if the government closes down after not passing a budget by Friday, the agency won't be able to insure any more loans.

Banks will still be able to make them, but they would have to hold on to them until the FHA restarted. If the shutdown continued, many lenders could simply choose to wait, disrupting the moving plans for many people nationwide.

A spokesman for Wells Fargo - the largest lender in the country - told the Wall Street Journal that it would continue to close loans, as long as "a shutdown doesn't continue for any extended period."

The FHA has taken up a growing portion of the mortgage market over the past few years. Multiple reports say it accounted for at least 40 percent of home mortgages last year.

Courtesy of 2M Realty News