How a Government Shutdown Affects Homebuyers and Homeowners

Updated: November 6, 2025

While infrequent and historically short-lived, federal government shutdowns still impact many families and communities across the United States. If you’re a homeowner or considering buying a home, you may be impacted, wondering what will happen to your mortgage application, or what you can do to cover your next mortgage payment. 

We’re here to help and break down the answers to critical questions that will help you navigate a government shutdown. 

So, what is a government shutdown?

A government shutdown happens when Congress fails to approve funding for federal agencies, such as the Department of Housing and Urban Development (HUD), the Department of Veterans Affairs, and the Social Security Administration, among others.

How does a government shutdown affect the housing industry?

A government shutdown can impact the housing industry by disrupting and slowing down functions that delay new home purchases and existing loan approvals, especially for first-time and low-to-moderate-income buyers.

How does a government shutdown affect mortgage services?

• Government-backed loans start to lag. First-time buyers often depend on mortgages from the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA), because their government insurance allows lenders to lower qualifying barriers. Shoppers who plan to use VA, USDA, and FHA loans may see processing delays as these agencies rely on emergency staffing during a shutdown.
• Verification lags slow application processing. Many loan types require tax transcript verification through the Internal Revenue Service and income verification through the Social Security Administration. These checks usually happen seamlessly, but they often aren’t available when government offices are closed.
• Flood insurance policies may lapse. Homes located in flood zones require insurance from the National Flood Insurance Program, whose funding stalls during government shutdowns.

How does the impact of a government shutdown build over time?

Since 1990, there have been five government shutdowns. The last government shutdown lasted 34 days, from December 22, 2018, to January 24, 2019. The most recent government shutdown is ongoing, marking the longest shutdown in recent history.  

Here’s how a government impacts the housing industry before and after 30 days, and what you can expect once it ends.

What can homebuyers and homeowners can do to prepare for a government shutdown?

Even if there’s no immediate problem, being proactive always pays off. A “short delay” does not mean “no risk”. An extended shutdown has a greater impact, and it’s wise to start preparing early.

Here’s what you can do to prepare:

• Using FHA, USDA, or VA for your home loan? Expect longer timelines. Keep documents current and stay in close contact with your lender, and respond promptly to lender requests.
• Is your income or job at risk of interruption? Review your payment buffer; contact your lender/servicer before missing payments; ask about temporary hardship or forbearance. 
• Already missed a mortgage payment? Contact your servicer, ask about forbearance options, avoid foreclosure rescue scams, and keep a record of your communications. 
• Buying or refinancing in a flood zone? Confirm NFIP coverage; ask your lender about private policy options while the NFIP is paused.
• Save some extra cash. Build a 1- to 2-month cushion for essential bills and mortgage or rent payments. Update your budget for the worst-case scenario (job/income delay, emergency repairs). 
• Beware of “rescue” scams! Use trusted free resources, rely on HUD-approved housing counselors and nonprofit financial advisors. 
• Stay informed. Check for federal policy changes as program delays may evolve, and review any financial-hardship agreements to ensure reinstatement once pay or benefits resume. 

What actions can you take to prevent late payments?

If you’re worried about your ability to continue making mortgage payments, don’t wait to take action. There are preventative ways to proactively protect and maintain your home investment.

More help with your mortgage in an emergency.

Bank & servicer fee-relief 

• What it offers: Many banks/servicers roll out fee waivers, payment extensions, and short-term hardship options specifically for shutdown-impacted customers.
• How to use: Contact your bank/servicer’s hardship team and ask for their shutdown relief; bring pay statements/layoff/furlough notice if you have one.  

HUD-approved housing counseling 

•  What it offers: Independent, HUD-approved counselors who can triage options, call servicers with you, and help prevent late payments/foreclosure.
•  How to use: Find a counselor or call the national hotlines: 

• • CFPB “Find a Housing Counselor” tool (powered by HUD). 
  • HUD counselor locator & phone: 800-569-4287. 
  • HOPE™ Hotline (24/7): 888-995-HOPE (an independent nonprofit). 

Flood-insurance workarounds during an NFIP lapse 

• What it offers: If the NFIP is paused or delayed, you may still be able to close with private flood insurance that is accepted by your lender.
• How to use: Ask your lender if a private flood policy is acceptable; check your state insurance department for licensed private flood insurers. 

• • Learn more about flood insurance. 
  • State Insurance Department Directory. 

One-stop national navigation for emergency bills 

•  What it offers: United Way 211 connects you to local mortgage/utility assistance, emergency repair programs, and vetted nonprofits — remains active regardless of shutdown. 
•  How to use: Call 211 or search your ZIP to get live referrals. 

Critical home-repair help 

• What it offers: Rebuilding Together affiliates provide no-cost critical repairs and accessibility modifications (availability varies by location; not tied to federal appropriations). 
• How to use: Search your local affiliate and apply. 

Mortgage-Related Terms to Know