10/03/2025
The federal government shutdown is already affecting key parts of the housing market- and if you're buying, selling, or refinancing, here's what you need to know. Most lending activity will continue as usual, but some delays or exceptions may apply depending on the loan program.
Government backed loans, FHA and VA, are still being processed, but reduced staffing could slow down approvals and appraisals.
*USDA rural home loans are currently paused.
Here are key areas to watch:
-IRS Transcripts (4506-C): Borrowers still sign, but transcripts may not be available until after closing.
-Verification of Employment for Government Employees: If verbal VOE can’t be obtained, lenders document attempts and proceed. Employment must still be warranted at delivery.
-Social Security Validation: Loans are not sale-eligible if SSN can’t be validated. Updates will follow when SSA resumes operations.
-Paystubs: Shutdown exception allows flexibility, but most recent YTD paystub is still required.
-Flood Insurance: National Flood Insurance Program (NFIP), managed by FEMA is currently on pause. There are private flood insurance alternatives that are available, such as Neptune, that can provide coverage.
-Reserves (if shutdown continues past Nov. 3): Borrowers directly impacted must show at least 2 months’ reserves or meet DU/manual guideline requirements.
