Govt Shutdown and what it means for you.

Welcome to this week’s Jason’s Information Drop!  We are now on day 15 of the shutdown and I know many of you have received questions and concerns from your clients about how it could impact their home buying or selling process. This week I would like to cover the continuing effects this shutdown is having on our industry and provide you with the latest information to effectively address your clients’ concerns. Let’s dive in…

As expected, the Senate failed to advance the funding bill Tuesday afternoon, and the government remains shutdown. At 15 days and counting, this is now the fourth-longest U.S. federal government shutdown in history. The longest government closure in our history came in 2018-2019 and was over the U.S./Mexico border wall debate. The current issue is centered on a disagreement over Affordable Care Act subsidies and other health care policy issues.

The most common question right now is, “How long will this last?” Unfortunately, there is no definitive answer. The current political standoff shows neither side willing to make concessions, leading many analysts to believe the shutdown will last for at least a couple more weeks. Many believe the next deadline for a resolution isn’t until the end of the month. For historical context, the second-longest shutdown in U.S. history lasted 21 days back in 1995.

While our industry feels the slowdown, many federal workers are already facing severe financial hardship. If your client is a government employee, they are likely furloughed or working without pay, which is currently affecting hundreds of thousands of people. Even though furloughed employees are guaranteed back pay once the government reopens, the current uncertainty makes underwriters reluctant to approve their loans to close. Although military pay is currently secured, that funding is not guaranteed if the shutdown extends into the next month. It is extremely important that you ask the right questions and work closely with your clients and their lenders to navigate the immediate risk this poses to their loan closing timeline.

The Real Estate Impact: What Your Clients Need to Know

The primary impact on the housing market is slowdowns and pauses in processing due to reduced or suspended operations at key federal agencies. This affects closings and loan approvals, especially for government-backed programs. Below is a quick reference guide on loans we deal with on a daily basis and how they are currently being impacted by the government shutdown:

Important Note for All Closings

Even conventional loans may be delayed if the property is in a FEMA-designated flood zone, as the National Flood Insurance Program cannot issue or renew policies during the shutdown. Existing policies remain valid, but transactions requiring new or renewed coverage may stall. An alternative option for your clients may be to secure a private flood insurance policy to meet their lender’s requirements and avoid closing delays, as the private market is not affected by the government shutdown. Lenders are permitted to accept private flood insurance, but you should confirm their specific requirements with the loan officer.

What can you do as an agent to get in front of potential issues during the shutdown:

My hope is that this newsletter is irrelevant by next week and the government shutdown is quickly resolved! However, just in case it isn’t, I hope this helps you in handling your client’s questions. On a separate note, I want to extend a massive thank you to everyone who made it to our company-wide rally yesterday. The speakers and panel were fantastic, and the positive feedback has been overwhelming. Seeing your dedication to continuous training is what makes ERA King exceptional.