How the Government Shutdown Could Affect Your Mortgage

Learn whether that could affect your ability to get a mortgage.

On October 1, 2025, the U.S. government shut down after lawmakers failed to pass legislation to provide additional funding. The shutdown is the first in over six years.

The shutdown means that certain services provided by the federal government will be paused temporarily until the funding issues are resolved. While essential services will continue, many workers will be furloughed, and there will be disruptions in operations across many agencies.

As of October 1, 2025, it is unclear how long the shutdown will last or what the far-reaching economic impacts will be. However, it is clear that the shutdown could have an impact on homebuyers who are looking to get a mortgage loan.

Here are the ways that a government shutdown could affect your ability to get a mortgage.

Can you get a mortgage during the government shutdown?

Most homebuyers applying for conventional mortgage loans (loans not backed by the government) will not be affected by the government shutdown, or the impact will be minimal. However, there are some exceptions.

If there is a discrepancy with your Social Security number, you may experience a delay in getting approved for a loan if automatic verification of Social Security numbers is unavailable from the Social Security Administration. It isn't yet clear if automatic verification will be affected by the shutdown.

Mortgage lenders also typically request tax transcripts from the IRS. While the IRS is expected to continue processing requests for transcripts, there could be delays depending on how many workers are furloughed or laid off.

Homeowners buying in flood zones will face added challenges

Homebuyers who are purchasing a home in a flood zone could face bigger challenges in getting a mortgage during the government shutdown. That's because funding for the National Flood Insurance Program (NFIP) ended when the shutdown began.

Without funding, the NFIP is unable to issue new policies. For homebuyers in FEMA-designated flood hazard areas, lenders typically require the purchase of flood insurance before closing on a mortgage. Since private insurers don't offer flood insurance in many parts of the country, insurance through the NFIP is often the only option.

With this option unavailable, loans will not be able to close. NFIP supports approximately 500,000 home sales annually, so the shutdown of this program could have a major impact.

Can you get an FHA Loan during the government shutdown?

It should be possible to continue to get FHA Loans during the shutdown. The Federal Housing Administration will continue to ensure mortgage loans for the purchase of single-family homes.

However, certain products like Title I loans and home equity conversion mortgages may not be available during the shutdown, and activities like condo projects that require direct staff input may be delayed.

Reduced staffing may also result in processing delays for FHA Loans, so getting to closing could take longer.

Can you get a VA Loan during the government shutdown?

VA loans should continue to be available, although there may be processing delays.

Can you get a USDA Loan during the government shutdown?

You will not be able to get a USDA loan during the shutdown. The Department of Agriculture will not guarantee any new home loans or issue new direct loans during the shutdown. Any scheduled closings for direct loans will be postponed.

If there are existing construction loans, funds may continue to be distributed if necessary to protect the USDA's interest in the property.

Can federal workers get a mortgage during the shutdown?

Federal employees who are furloughed will typically not be able to close on their home loan until the shutdown has ended and normal payments have resumed. Applications will be put on pause until that time.

If workers are laid off permanently, applications that relied upon their income will be denied.

How will the government shutdown affect mortgage rates?

It is unclear exactly how a government shutdown will affect mortgage rates; however, economic uncertainty, a potential reduction in the GDP resulting from the shutdown, and looming recession fears could send more investors to bond markets and set up the conditions necessary for lenders to reduce rates.

Rates have fallen during some past shutdowns, including the December 2018 to January 2019 shutdown, although there is no guarantee of this pattern repeating.

The Federal Reserve's October meeting could also be impacted by a lack of inflation and payroll data, as the Bureau of Labor Statistics and Department of Commerce will not be publishing economic reports during the shutdown .

This could affect the willingness of the Federal Reserve to push through another rate cut without the necessary information to understand the state of the economy. While the Federal Reserve does not control mortgage rates, its decision on the Fed Funds rate (the overnight rate at which banks borrow from each other) can impact the mortgage market.

Reach out to a mortgage loan officer

If you are concerned about the impact of the government shutdown on your ability to borrow, your best option is to speak with a mortgage loan officer about your specific situation.

A loan officer is in the best position to provide insight into eligibility, processing times, and insurance requirements, so don't hesitate to reach out for help during these uncertain times.