Government Shutdown: What It Means for Housing Programs Right Now

As many of you know, Congress missed the September 30 deadline to approve funding for government operations, triggering a partial shutdown that began at midnight. While this isn’t the first time we’ve seen a lapse in funding, it’s always unsettling—especially when it touches areas as essential as housing and mortgage support.

I’ve been following the impact closely, particularly how it affects programs many of us rely on in our work and communities. Here’s a quick breakdown of what’s happening behind the scenes:

HUD (Dept. of Housing and Urban Development) has a contingency plan in place, which means some housing programs are still running—though not at full speed. The Federal Housing Administration (FHA) is continuing to endorse most new single-family loans, but certain types of loans may be on hold.

As of October 1, the National Flood Insurance Program (NFIP) has lost its authority to issue new policies due to the shutdown. Existing flood insurance policies remain valid for 30 days and can be transferred to new owners, but the longer this lapse continues, the more uncertainty creeps into the market. For buyers and sellers in flood-prone areas, this could mean delays, renegotiations, or even lost deals. Borrowers may need to explore private flood insurance options.

If you’re working on condo project approvals or anything that requires direct staff input, expect delays. That said, it sounds like core FHA operations—like paying claims, servicing mortgages, and managing HUD-owned properties—are supposedly still active.

The FHA Resource Center is still open, but with fewer staff, so response times may be longer and case-specific help may be limited.

Housing counseling agencies can continue offering services—but only if they’ve already received grant funding and have the cash flow to sustain operations. New grants, renewals, and payments are paused unless it’s an emergency, so some agencies may need to scale back temporarily.

For those using Housing Vouchers, Assistance Payments tied to existing obligations will continue. However, new funding requests and approvals are delayed. Extended shutdowns could strain Public Housing Authorities as well, so I recommend landlords and tenants check in with their local Public Housing Agencies for updates.

Source: National Association of Realtors