Homebuyers waiting on news about their mortgage applications might have to sit tight, thanks to the federal government shutdown now in its third day.
About 3,500 federally backed mortgage loans per business day could face processing delays due to the legislative impasse in efforts to fund the federal government, according to Zillow Research.
The Senate reached a deal mid-Monday to end the government shutdown until Feb. 8, with a House vote expected later in the afternoon.
If the shutdown ends, it would be good news for mortgage applicants. A shutdown lasting as long as the last one — Oct. 1 to Oct. 16, 2013, covering 12 business days — would mean that upwards of 42,000 would-be buyers would see their mortgage applications take longer to process, Zillow said.
"The government shutdown will have an impact on real estate transactions should it continue for an extended period of time," said Elizabeth Mendenhall, president of the National Association of Realtors, in a statement to CNBC.
The shutdown, which began Saturday after congressional leaders failed to reach a spending agreement to keep the government funded, means that many federal functions are shuttered.
With hundreds of thousands of government workers furloughed — excluding those considered essential employees — paperwork backups are likely to occur in the mortgage-approval process.
Borrowers with loans from the U.S. Department of Veterans Affairs, the Federal Housing Administration or the Rural Housing Service will feel the most direct impact because furloughed workers are involved in processing those loans. However, those loans comprise a small fraction of mortgage loans processed nationwide, according to Zillow.
Loans backed by Fannie Mae and Freddie Mac — which are government-sponsored agencies — are unaffected by the shutdown. These mortgages represent about two-thirds of all federally backed loans nationwide.
Additionally, if your lender is in the process of verifying all of your documents, there could be delays in income verification with the Internal Revenue Service. About 57 percent of the IRS's 80,000 employees are furloughed.
During the 2013 government shutdown, about 17 percent of closings were delayed, according to a survey done by National Association of Realtors. The group attributed most of those delays to an income-verification backlog at the IRS.