ORANGE COUNTY, Fla. \u2014 As the federal government shutdown stretches into its third week, Florida Realtors say ripple effects are starting to hit the state\u2019s housing market.<\/p>\n
At a meeting of Central Florida real estate professionals on Wednesday, agents discussed how they\u2019re navigating an increasingly complicated market. While many say they\u2019ve found workarounds, they worry if the shutdown continues much longer, the impacts could grow.<\/p>\n
\u201cThe hot topic today is the government shutdown. How it\u2019s going to affect us not only right now, but if it goes long, how does that affect our clients and transactions?\u201d said Raymond Lopez, a Realtor and the Owner of Lake Nona Keller Williams.<\/p>\n
Lopez said the shutdown is already impacting some government-backed mortgage programs.<\/p>\n
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. <\/p>\n
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.<\/p>\n
\u201cThings are still going through and being funded,\u201d Lopez said. \u201cBut we have to be aware of how long it\u2019s going to take.\u201d<\/p>\n
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\u2019s gross domestic product, according to the National Association of Realtors, meaning a slowdown in home sales could ripple across the state\u2019s broader economy.<\/p>\n
\u201cWhen real estate suffers, unfortunately the economy suffers,\u201d Lopez said. \u201cThat\u2019s what could happen as the government stops longer and longer.\u201d<\/p>\n
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.<\/p>\n
That\u2019s a serious issue in Florida, where more than 1.7 million residents have flood insurance through the NFIP.<\/p>\n
\u201cFlorida sells more flood insurance than the next nine states combined,\u201d said Tom Cotton, president of Hugh Cotton Insurance, an Assured Partner Member Agency.<\/p>\n
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.<\/p>\n
\u201cIn the other zones, there are private carriers that will write insurance, and they\u2019re still writing insurance even today,\u201d Cotton said.<\/p>\n
Insurance experts say homeowners who already have active flood insurance through the federal program won\u2019t lose coverage during the shutdown.<\/p>\n
In the meantime, Citizens Insurance, the state-backed insurer, has temporarily waived its requirement for proof of flood insurance during the shutdown.<\/p>\n
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.<\/p>\n
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