How a Government Shutdown Could Affect Home Loans

• September 30th 2025

by UrbanTurf Staff

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The federal government could be shut down by the end of today, and that shutdown could effect homebuyers, particularly when it comes to home loans. 

Fannie Mae and Freddie Mac will likely still continue processing mortgage loan applications despite a shutdown, however, federal government employees in the midst of buying a home may not be able to have their incomes verified. 

During past shutdowns, Fannie Mae has issued guidance for how its verification and approval process will operate, noting that some aspects of the process (like acquisition of IRS transcript verification reports and social security verification) will be delayed until the government is funded and operational. The agency is usually unable to purchase loans that closed and delivered prior to an applicant having verbal verification of employment, however. Mortgagees may also be able to secure mortgage loan forbearance if they are not being paid during the shutdown.

If a shutdown happens, the Federal Housing Administration (FHA) may become backlogged with mortgage loan applications due to having fewer staff on hand. The Department of Housing and Urban Development (HUD) will also (slowly) continue to approve mortgage loans for single-family homes, although the agency will be be unable to approve financing for pending multifamily projects. 

This article originally published at https://dc.urbanturf.com/articles/blog/how_a_government_shutdown_could_effect_home_loans/21511.