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As the federal government shutdown continues, several agencies that play vital roles in mortgage lending have reduced or suspended operations. While many aspects of the mortgage process are still functioning, some government-backed programs and verification systems are being delayed — and that can affect both new and in-progress loan applications.

Here’s a clear breakdown of what continues, what might be delayed, and what we can do together to minimize the impact.

What Continues (or Is Expected to Continue)

• VA Loans 
  The VA portal is fully functional. Appraisals, Notices of Value (NOVs), and Certificates of Eligibility (COEs) are still being issued. No known disruptions at this time.
• FHA Connection 
  FHA systems are operational. Customer service is available, though with limited staffing and longer wait times. FAQs will not be updated during the shutdown.
• Private Flood Insurance 
  Private flood policies are unaffected and continue under normal protocol. Most flood insurance policies we see fall into this category.

 

What Might Be Delayed or Impacted

• USDA Loans 
  USDA employees are furloughed and funding is suspended. No new loan guarantees are being issued. USDA loans cannot move forward until operations resume. No ETA is available. Please notify all parties of delays and consider alternative financing options.
• NFIP Flood Insurance 
  The National Flood Insurance Program is unavailable during the shutdown. However, loans with a signed application and paid receipt confirming the policy is “in force” may still be accepted.
• IRS Tax Transcripts 
  Transcript requests (Form 4506-C) are not being processed. We’re temporarily suspending transcript requirements in most cases, but some loan programs may still require them. Borrowers must show proof that returns were filed and taxes are paid or under a payment agreement.
• Social Security Verification 
  If we cannot validate a borrower’s SSN directly with the SSA due to data integrity issues, the loan cannot close until verification is available.
• Borrowers on Furlough 
  Borrowers temporarily laid off due to the shutdown must return to work before closing to use their income for qualification. Required documentation includes:
  • Verbal verification from the employer confirming return to work under same terms.
  • Most recent pay stub supporting qualifying income.
  • VA Loans: A copy of the furlough notice is required upon return.
  • FHA Loans: Income preceding the shutdown may be considered Effective Income for government employees.
• Reserve Requirements (If Shutdown Extends) 
  For applications dated on or after November 3, 2025, impacted borrowers will need two months of documented reserves. We’ll send reminders if the shutdown continues into late October.

 

What You (and I) Can Do to Stay Ahead

• Stay in Communication 
  If your loan involves USDA, IRS transcripts, or government employment, please reach out so we can assess your options and adjust timelines.
  Explore Alternatives 
  For USDA delays, we may be able to pivot to other loan programs. Let’s discuss what’s possible.
  Prepare Documentation 
  Borrowers should gather W-2s, pay stubs, and tax filing confirmations. An executed 4506-C is still required in all cases.
  Monitor Updates 
  I’ll continue to share updates as we receive them from federal agencies and housing authorities—including Florida Housing’s stance on transcript requirements.

 

Bottom Line

We’re committed to navigating this together. While some delays are unavoidable, proactive communication and planning can help keep your home loan on track. If you’re affected by any of these changes, let’s talk—we’ll find the best path forward.
 

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