Government Shutdown: Does It Affect Homebuyers and Sellers?

The short answer is “most likely, no” — most loans are still moving forward.  However, with the government shutdown potentially lasting longer than expected, there are a few areas that could cause delays or require additional documentation.

At LowRate Home Loans, Inc., we want to keep you informed so you can set the right expectations with your clients.

Key Impacts to Be Aware Of:

Tax Transcripts (IRS)

• Borrowers must still sign Form 4506-C, but transcripts aren’t required before closing. Some post-closing QC or DU validation steps may experience delays.

USDA/Rural Development Loans

• Conditional commitments and guarantees could be delayed, though program eligibility remains active.

Flood Insurance (NFIP)

• This program expired with the shutdown.  Until reauthorized, FEMA cannot issue or renew flood insurance policies.  Any renewals falling within this lapse cannot be processed.

Borrower Employment & Income

• Federal employees/contractors on furlough remain eligible if documentation requirements are met.

• Verbal VOE is waived if unavailable due to the shutdown (must document attempts).

• Flexibility allowed on paystub dates (not required within 30 days of application, but must show YTD earnings).

• If the shutdown extends beyond Nov. 3, 2025, minimum reserve requirements will apply (greater of 2 months or DU guidance).

Social Security Number Validation

• Processing may be delayed.  Loans requiring SSN validation must have this cleared before delivery to Fannie Mae.

What This Means for You:

While some government functions are paused, loan production continues.  Our team is closely monitoring all agency updates to help minimize any disruptions and keep closings on schedule.

We’re here to guide you and your clients through these temporary challenges. If you or any home buyers/sellers that you know are concerned about the impact, don’t hesitate to reach out — you can call us directly at 214-221-4008 or visit www.lowratehomeloans.com to learn more about your options.