What the Government Shutdown Means for Your Clients

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Buckle up, Congress has failed to pass funding for most government operations and until they do, many offices and programs of the federal government are now shut down. This means federal housing and mortgage programs have been suspended or slowed due to the lapse in government funding.  NAR has an evolving document that outlines what can be expected from the relevant housing programs and agencies during a shutdown including the EPA, HUD, GSEs, IRS, NFIP, Rural Housing Programs, Veterans Affairs, Small Business Administration, and Visa Programs. Check out this NAR memo for the latest information.
In brief, we do know that the National Flood Insurance Program (NFIP) lapses with shutdown.  Have clients with property in a flood zone?  You will need to look beyond the NFIP.  NAR estimates that 1,400 property transactions per day, nationwide, will be affected.  For buyer clients, existing policies remain valid for 30 days and can be transferred to new owners, but
uncertainty grows the longer the lapse continues. You should urge caution and consultation with insurance professionals ASAP!
  • Housing Market at Risk:  Every day the shutdown continues, potential real-life impacts will be felt in America’s housing market, which accounts for nearly 20% of the U.S. economy.
  • Beyond NFIP, government shutdowns often delay IRS income verification, FHA and VA loan processing, and federal housing program funding—slowing or halting transactions nationwide.
  • In total, shutdown-related disruptions could touch hundreds of thousands of homebuyers, sellers, and renters, adding uncertainty to a market already struggling with affordability and
    supply challenges.

NAR and our REALTOR Federal Political Coordinators nationwide communicated directly with their Congressperson urging NFIP extension.  NAR continues pressing lawmakers to reauthorize NFIP and end the shutdown immediately.

Statement from Shannon McGahn, NAR Executive Vice President and Chief Advocacy Officer:  “According to NAR research, the NFIP supports roughly half a million home sales annually, generating 1 million jobs and contributing $70 billion to the U.S. economy,” said McGahn. “Each day that passes during the shutdown, potential real-life impacts will be felt in America’s housing market, which accounts for nearly 20% of the U.S. economy. That is why NAR urges Congress to reach a funding agreement to reopen the government, while we also continue to advocate for a stable, long-term reauthorization of the NFIP so that families, businesses, and markets can move forward with more certainty.”