ORANGE COUNTY, Fla. — As the federal government shutdown stretches into its third week, Florida Realtors say ripple effects are starting to hit the state’s housing market.
At a meeting of Central Florida real estate professionals on Wednesday, agents discussed how they’re navigating an increasingly complicated market. While many say they’ve found workarounds, they worry if the shutdown continues much longer, the impacts could grow.
“The hot topic today is the government shutdown. How it’s going to affect us not only right now, but if it goes long, how does that affect our clients and transactions?” said Raymond Lopez, a Realtor and the Owner of Lake Nona Keller Williams.
Lopez said the shutdown is already impacting some government-backed mortgage programs.
For example, The U.S. Department of Agriculture has stopped issuing new loans. The agency provides loans to low to moderate-income households in eligible rural areas.
Meanwhile, buyers using Federal Housing Administration (FHA) or Veterans Affairs (VA) loans may also face significant delays because both agencies are operating with limited staff.
“Things are still going through and being funded,” Lopez said. “But we have to be aware of how long it’s going to take.”
Realtors at the meeting emphasized that for now, the market is still moving, but the uncertainty is concerning. Real estate accounts for more than 24% of Florida’s gross domestic product, according to the National Association of Realtors, meaning a slowdown in home sales could ripple across the state’s broader economy.
“When real estate suffers, unfortunately the economy suffers,” Lopez said. “That’s what could happen as the government stops longer and longer.”
Another concern is flood insurance. Before homebuyers can close on a property, some lenders require proof of flood insurance coverage. But during the shutdown, the National Flood Insurance Program (NFIP) which is run by the federal government, cannot issue or renew new policies.
That’s a serious issue in Florida, where more than 1.7 million residents have flood insurance through the NFIP.
“Florida sells more flood insurance than the next nine states combined,” said Tom Cotton, president of Hugh Cotton Insurance, an Assured Partner Member Agency.
Cotton said that while some private carriers are still writing flood insurance policies in lower-risk areas, people buying in high-risk flood zones may have no choice but to wait until the government reopens.
“In the other zones, there are private carriers that will write insurance, and they’re still writing insurance even today,” Cotton said.
Insurance experts say homeowners who already have active flood insurance through the federal program won’t lose coverage during the shutdown.
In the meantime, Citizens Insurance, the state-backed insurer, has temporarily waived its requirement for proof of flood insurance during the shutdown.
And according to Lopez, government backed mortgage companies Fannie Mae and Freddie Mac have relaxed flood insurance requirements allowing an estimated 1,300 home sales a day that require a policy to move towards closing.
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