How the Federal Government Shutdown Is Impacting the Mortgage Market
As of October 1, the U.S. government has entered a partial shutdown, and the ripple effects are already reaching the mortgage and housing markets.
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The USDA has furloughed most of its staff, putting loan guarantees and conditional commitments on hold.
The FHA is still processing endorsements but has paused some condo project approvals, and Section 8 authorizations are delayed.
VA loans and Ginnie Mae are still operating but with reduced staffing, while Fannie Mae and Freddie Mac remain unaffected for now.
A major concern is FEMA’s inability to issue new or renewed flood insurance policies. Because these policies are required for Fannie and Freddie securitizations, borrowers in flood zones may find their rate-locked loans stuck in limbo.
This situation could create an opening for private lenders, like Rocket Mortgage or UWM, to step in and keep deals moving, possibly by temporarily easing flood insurance requirements.
As the shutdown continues, lenders, borrowers, and real estate professionals will need to stay flexible and closely monitor how these changes unfold.
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As of October 1, the U.S. government has entered a partial shutdown, and the ripple effects are already reaching the mortgage and housing markets.
,
The USDA has furloughed most of its staff, putting loan guarantees and conditional commitments on hold.
The FHA is still processing endorsements but has paused some condo project approvals, and Section 8 authorizations are delayed.
VA loans and Ginnie Mae are still operating but with reduced staffing, while Fannie Mae and Freddie Mac remain unaffected for now.
A major concern is FEMA’s inability to issue new or renewed flood insurance policies. Because these policies are required for Fannie and Freddie securitizations, borrowers in flood zones may find their rate-locked loans stuck in limbo.
This situation could create an opening for private lenders, like Rocket Mortgage or UWM, to step in and keep deals moving, possibly by temporarily easing flood insurance requirements.
As the shutdown continues, lenders, borrowers, and real estate professionals will need to stay flexible and closely monitor how these changes unfold.
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