What the Government Shutdown Means for Real Estate Right Now
If you’ve been watching the headlines, you already know: the federal government is in shutdown mode. But what does that actually mean for buyers, sellers, refinances, and investors who are trying to move forward with real estate?
The truth is, deals are still getting done. But depending on the loan type (or if you’re in commercial real estate), you could see delays, detours, or even roadblocks. Let’s break it down.
Residential Real Estate: What Buyers, Sellers, and Borrowers Need to Know
For most homebuyers and homeowners, the impact is minimal—but not invisible. Here’s where we stand:
-
Conventional (Fannie Mae/Freddie Mac): No impact. These loans continue as usual.
-
VA Loans: Still active, but expect appraisal delays. Veterans and their agents should pad timelines.
-
FHA Loans: Single-family FHA loans are still closing. But if you’re working with condos or need staff approvals, expect slower turnaround.
-
USDA Loans: No new commitments or guarantees are being issued during the shutdown. Deals already in the pipeline may close once USDA reopens.
-
Tax Transcripts (IRS): The IRS says transcripts will still be processed, so refinances and verifications shouldn’t stall here.
-
Social Security Verification: Still required, still functioning.
-
Flood Insurance: The National Flood Insurance Program (NFIP) may pause new or renewal policies. Private flood insurance could be the workaround.
-
Federal Employees as Borrowers: If furloughed, their income can’t be used to qualify until they return to work.
What this means: Sellers may wait longer to close, buyers may need backup strategies, and refinances are moving forward but could slow if income verification is tied to federal employment.
Commercial Real Estate: Where the Impact Is Heavier
Commercial real estate (CRE) is feeling the brunt more directly. That’s because federal agencies and approvals play a bigger role here:
-
IRS Transcripts Halted: With the IRS IVES system down, underwriters may have to pause while waiting for 4506-Cs.
-
Economic Data Delayed: Reports on jobs, inflation, and construction spending aren’t being released. That makes it harder for lenders to gauge market risk.
-
SBA Loans on Hold: No new 7(a), 504, or Express loans are being processed. Deals relying on SBA financing will stall until funding is restored.
-
HUD/FHA Multifamily Slowdowns: Limited staffing means endorsements and approvals are dragging.
-
Federal Courts Delayed: Bankruptcy and other civil cases tied to CRE may get postponed if the shutdown continues.
The Bottom Line
This isn’t a market shutdown—it’s a government slowdown.
-
For residential: Buyers and sellers should prepare for slightly longer timelines on VA, FHA, and USDA loans, but conventional deals will keep moving.
-
For commercial: Expect underwriting slowdowns, SBA loan freezes, and a lack of economic data to guide lending.
The last shutdown lasted 35 days. This one could stretch weeks, not days. But here’s the good news: opportunities are still out there. The agents and lenders who stay proactive, anticipate bottlenecks, and educate their clients will come out ahead.
✅ If you’ve got a client worried about delays, or a deal that feels stuck, let’s talk. Together, we’ll navigate the changes, find solutions, and keep your deals moving forward.
