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Realtors Fear Gov't Shutdown Could Put Housing Recovery at Risk

SPRINGFIELD, Mo. -- A government shutdown could put the recovering housing market at risk because some mortgages won't be processed.
SPRINGFIELD, Mo. -- A government shutdown could put the recovering housing market at risk because some mortgages won't be processed.

Mortgages backed by the federal government account for about 90 percent of U.S. home loans. So can people still get a federally backed loan under a government shutdown?

USA Today reports federal loans for rural communities, small business owners and families buying a new home will be frozen.

But the Federal Housing Administration says it will endorse new loans under current multi-year appropriation authority, in order to support the "health and stability of the U.S. mortgage market."

Either way,  some realtors say a shutdown will have a negative impact on the housing  market.

If people are furloughed they're not going to be buying homes s believes Randy Henderson with Carol Jones Realty in Springfield.  "A $30,000 car is dependent on a $20 dollar part and I think there could be a lot of employees, government employees, that slow down the process to the point where we are going to have problems."

To further complicate the matter, mortgage companies use a request form to verify income from the IRS and realtors fear the shutdown would delay the entire loan process if IRS employees are furloughed.

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