Government Shutdown Impact on Housing Programs: What Borrowers and Realtors Need to Know

FHA Loans (HUD)

The Federal Housing Administration will continue to endorse single-family loans. Core systems remain online:

• FHA Connection and case number assignment
• TOTAL Scorecard
• LEAP, LRS, Neighborhood Watch, Catalyst, CAIVRS

Expect limitations and delays:

• Files requiring FHA staff may take longer to endorse
• HECM (reverse mortgages) and Title I loans will not be endorsed
• Condo approvals limited to DELRAP (HRAP paused)
• Lenders must verify borrower information (credit, public records, etc.)
• MIP collections continue; lenders must remit premiums on time

Servicing: FHA will continue paying partial claims, servicers may file claims and convey properties,
and delinquency reporting via SFDMS remains required.

VA Home Loans

The Department of Veterans Affairs reports that housing benefits and the VA loan guaranty program remain operational.
Expect slower responses due to reduced staffing, but guarantees continue using available prior-year funding.

USDA Rural Development Loans

The USDA Rural Development program is significantly constrained during the shutdown:

• No new conditional commitments will be issued
• No loan guarantees for loans closed during the shutdown without a prior commitment

Reference: USDA Lapse Plan.

National Flood Insurance Program (NFIP)

• No new or renewal flood insurance policies can be issued during the shutdown
• Existing policies remain in force until their expiration date

Bottom Line

• FHA and VA: Operational, but anticipate processing delays and limited staff availability
• USDA: Paused until funding resumes
• NFIP: No new or renewal policies during the shutdown

If you’re buying, refinancing, or selling, plan for longer timelines and coordinate closely with your lender and real estate agent.

Frequently Asked Questions

Can I still get an FHA loan during the shutdown?

Yes. FHA is continuing to endorse single-family loans and its systems remain online, though files requiring FHA staff involvement may face delays.

Are VA home loans affected?

VA loans are still being guaranteed and housing benefits are active. The main impact is slower response times due to reduced staff.

What happens to USDA loans?

USDA will not issue new conditional commitments or loan guarantees until the shutdown ends. Transactions requiring USDA financing will be on hold.

Will my flood insurance policy be canceled?

No. Existing NFIP policies remain valid until their expiration date, but no new or renewal policies can be issued during the shutdown.

What should borrowers and real estate professionals do right now?

Plan for longer timelines, keep communication open with your lender, and prepare buyers for potential delays—especially if USDA financing or new flood insurance is required.