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government shutdown impacts on military real estate

Funding legislation for Fiscal Year 24 has been extended until 7 NOV – a big sigh of relief for everyone who had the potential to be critically impacted by a government shutdown. 

Crisis is likely averted, unless of course, a 7-week extension isn’t long enough for all sides to come to an agreement.

Regardless, let’s take a look at the impact of a government shutdown, especially when it comes to housing and the VA loan.

How does a government shutdown impact active duty military?

If you are Active Duty you will still go to work, but things will be far from normal. 

According to Department of Defense guidance, military personnel on active duty, including reserve component personnel on Federal active duty will continue to report for duty. Hundreds of thousands of civilian personnel who are not necessary to carry out or support expected activities will be furloughed. Service Members would also have to cover some work that is normally done by furloughed civilians. 

Temporary duty travel (TDY) scheduled to begin after the shutdown occurs should be canceled. 

Service members will not be paid on schedule unless legislation is passed to continue troop pay, which has been done in the past. Any pay missed would eventually be back paid. 

Commissaries overseas would remain open, but stateside would close. 

Elective surgeries and procedures in DoD medical and dental facilities would have to be postponed.

Will a government shutdown impact veterans?

Fortunately, Veterans receiving disability pay and Retirees would still be paid during a shutdown. Medicare and Medicaid would be unaffected. The U.S. Postal Service will also continue to run.  

Will my VA loan be affected by a government shutdown?

Short answer, no.

The Department of Veterans Affairs guarantees VA loans, but does not fund them. Private mortgage companies actually fund the loan. If the government is shutdown and the VA is not functioning in its normal capacity, your ability to use a VA loan will not be affected.

However, if the shutdown is prolonged, it may affect a buyers ability to apply for a loan because income verification may be unavailable.

Practical tips for surviving a government shutdown

So what can you do? 

Ensure your savings accounts are in order so that you are able to continue to pay bills without your normal paycheck. It’s wise to keep at least 3 months of expenses saved as an emergency fund, just in case.

You can also check with your local bank for any relief they may be able to provide.

USAA has a Government Shutdown Program that can provide you a one-time, no-interest loan equal to the amount of your net pay, from $500 to $6,000, designed to help with payment disruption (if you normally have your pay direct deposited into USAA.)

Other companies are also allowing credit card payments to be delayed, overdraft fees being waived, and payment plans set-up for various loans. 

Although a shutdown is unlikely at this point, it’s important to recognize that military pay, although seemingly the most stable and consistent in the marketplace, is still vulnerable to disruption – and it would be wise to plan your finances accordingly BEFORE the next shutdown happens.

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