The federal government officially shut down at midnight last night, after Congress failed to pass a funding bill. While this doesn’t bring the housing market to a halt, it does throw a wrench into some key parts of the residential real estate process.
Most loan activity through Fannie Mae and Freddie Mac will continue, since they’re not federally funded, but deals involving the federal government directly will see delays or stoppages. USDA loans are paused completely. FHA and VA loans are still technically operational, but with fewer staff and slower processing, timelines are going to slip.
Closings that require IRS income verification or Social Security number validation could also get hung up. These systems often go offline during a shutdown or end up buried in backlogs. If your deal involves property in a flood zone, that’s another red flag—because the National Flood Insurance Program (NFIP) may not be issuing or renewing policies, depending on how FEMA handles it.
The impact will vary depending on how long the shutdown drags out, but make no mistake: this will disrupt residential transactions across the country. Not all deals will stall, but enough will to matter.