What Happens to Mortgages During a Government Shutdown?

When the government shuts down, many homebuyers and homeowners wonder what happens to their mortgage applications or closings. While the housing market doesn’t completely stop, a shutdown can slow down the process and create temporary delays in certain areas.

What Still Works

Most conventional loans backed by private lenders (like Fannie Mae and Freddie Mac)continue to operate. Lenders can still process and close these loans, although some verifications may take longer.

What May Be Delayed

• FHA and VA loans may experience slowdowns because they rely on federal employees to review and approve files.

• IRS Income verifications (Form 4506-C) and Social Security number checks may be delayed, which can stall underwriting.

• USDA loans often pause completely since the USDA isn't able to issue new loan commitments during a shutdown.

What Borrowers Can Do

If you’re in the middle of buying or refinancing a home, stay in close contact with your mortgage consultant. They can help you plan around possible delays and ensure all paperwork is ready once operations resume.

A government shutdown doesn’t stop the housing market - it just slows it down. With preparation and guidance, most borrowers can still reach the clear-to-close state successfully.