How the Federal Government Shutdown Impacts Home Buying & Selling (2025)

Background on the Government Shutdown

A government shutdown occurs when Congress fails to agree on a budget or a temporary funding bill, leaving federal agencies without the necessary funds to operate at full capacity. During a shutdown, “non-essential” government employees are furloughed, and certain services pause until funding is restored.

This isn’t the first time it’s happened. The most recent major shutdown was in 2018–2019, which lasted 35 days, the longest in U.S. history. In that case, agencies like the IRS slowed down significantly, and many Americans felt ripple effects in their day-to-day life.

To “re-open” the government, Congress must pass a funding bill (or a temporary stopgap bill) that both chambers agree on, and the President must sign it. Until that happens, many programs — including those connected to real estate — will operate with reduced staff or stop completely.

What this means for the everyday person:

• Federal workers may face furloughs or delayed paychecks.
• Some services, like passport processing, national parks, and certain benefits, may be slowed or suspended.
• For homebuyers and sellers, it means some parts of the loan and insurance process may take longer or pause altogether.

VA Loans

VA loans are still being processed and guaranteed because the Department of Veterans Affairs has funds in place. This means military families and veterans can continue moving forward. However, there may be slower turnaround times for appraisals, Certificates of Eligibility (COEs), and underwriting reviews due to limited staffing.

Advice: If you’re using a VA loan, plan for potential delays and maintain close communication with your lender. Build extra time into your contract deadlines if possible.

FHA Loans

Most FHA loans are still moving forward. Lenders can underwrite and close standard FHA purchases and refinances. However, programs that require HUD staff involvement, such as reverse mortgages, Title I loans, or new condo approvals, are paused. HUD is also working with reduced staff, so response times may be slower overall.

Advice: Standard FHA buyers can still close, but be flexible with your closing timeline in case of slowdowns.

USDA Loans

USDA loans are on hold during the shutdown. No new guarantees or direct loans are being issued until the government reopens. For buyers counting on this program, this unfortunately means delays.

Advice: If you’re under contract with a USDA loan, talk with your lender about backup options or potential extensions until the program is operational again.

IRS & Social Security Verifications

Many lenders require IRS income transcripts (4506-C) and Social Security number verifications before closing. At the moment, IRS transcripts are still being processed, but if the shutdown continues, that service may be disrupted. Social Security verifications are already facing delays.

Advice: Be prepared for your lender to request additional documentation or to verify income and identity after closing if these services are unavailable in the short term.

Flood Insurance (NFIP)

The biggest immediate issue is flood insurance. The National Flood Insurance Program (NFIP) has lapsed, meaning no new policies can be issued or renewed. Buyers needing flood coverage cannot close unless they obtain private flood insurance or assume an existing policy.

For North Texas buyers, this matters, especially in areas near creeks, lakes, or flood zones.

Advice: If your lender requires flood insurance, ask whether private coverage is an option. Don’t wait until closing day to address this. Confirm with your lender and insurance provider right away.

What This Means for DFW Buyers and Sellers

• Buyers: Stay in close contact with your lender. Build in extra time for closings, especially if you’re using VA, FHA, or USDA financing. If flood insurance is required, address it as early as possible.
• Sellers: Be patient with buyers whose loan processes may be delayed. Flexibility with closing dates may help keep a deal together.
• Everyone: Real estate is still moving forward. Homes are being bought and sold every day. It just may take a little extra coordination during this time.

My Commitment to You

While the government shutdown creates challenges, it doesn’t stop real estate from moving forward. My role is to keep you informed, anticipate potential delays, and guide you through solutions so you feel confident every step of the way. If you’re considering buying or selling a home right now, let’s connect. I’ll help you navigate this uncertain period, work closely with your lender, and set realistic expectations so you can still achieve your goals.

📞 Madeline Madrid, Real Estate Agent with Realty Texas
Your North Texas Real Estate Resource

madeline-madrid@realtytexas.com