Potential first-time home buyers will have to wait a little longer to purchase if they want to use a loan program where they put little to know money down.
FHA loans and mortgages under the Rural Development Program -- which receive their funding from the federal government -- are temporarily on hold, leaving people with few options but to wait.
"Everybody who is in the pipeline right now, who is in the process of being approved by rural development is basically on hold, for who knows how long," said Tom Hacker, a mortgage banker at Summit Community Bank. "It also means that anyone who wanted to apply for a rural development loan is on hold as well, so those people shopping right now, they're on hold. They don't know when they can apply."
Hacker's office received a notice Monday saying the federal offices wouldn't be processing government loans. The Department of Rural Development's website is also down.
"It definitely is an annoyance," Hacker said. "When you have a very popular program like that that's out of service, it's tough."
As long as a property is in a rural location -- as classified by the department's website -- the buyer doesn't own another property and the buyer's household makes less than $75,000 per year, that buyer is eligible for a plan that is 100 percent financed.
Hacker says it's a popular program, particularly among first-time home buyers, and particularly in the tri-county area, where as much as 60 percent of the property qualifies as rural.
Michigan's housing market has rebounded from recession, said Pete Holoway, president of the Greater Lansing Association of Realtors, up 12 percent from a year ago. He says despite the delay on some mortgages, he doesn't expect the market to fall.
"The real estate market is a great market here in town," Holoway said. "Don't let this deter you from buying or selling, this is still a great time and we'll work through this."