Shutdown affecting home closings, loan processing

SHERIDAN — Experts say an already strained housing situation across the country has been affected by the federal government shutdown, which is nearing the 30-day mark.

Just after midnight on Oct. 1, the federal government shut down after Congress failed to pass appropriations legislation for the 2026 fiscal year. On Tuesday, the Senate held a 13th procedural vote on a bill to end the impasse.

Annie Wedgewood, 2025 President of Wyoming REALTORS®, said that while each market is different in the types of loans that are used, lending has “absolutely (been) impacted by the shutdown.”

“Many real estate professionals are having open dialog with our consumers about how the shutdown can impact a transaction, and as the shutdown continues, we will see it impact the housing industry more each day and week,” Wedgewood said.

In a podcast from the National Association of REALTORS® (NAR) this month about the shutdown, NAR's Executive Vice President Shannon McGahn said that real estate is one of the most heavily taxed transactions, as well as one of the most heavily regulated.

“That means there are many federal government programs that are involved in the real estate transaction process,” McGahn said. “When you do have a shutdown with fewer staff, potentially lapsed programs, you could see delayed approvals, delayed paperwork going through. And even if those functions do continue, that uncertainty will slow deals and hurt buyer confidence.”

The NAR has communicated directly to policy makers that “there are home closings that could be delayed or that could be complicated by this process,” she said.

“It's not just a national flood insurance program. There are many other programs involved here,” McGahn said.

Wyoming Community Development Authority Deputy Executive Director Christopher Volzke said that his organization is also monitoring the ongoing federal government shutdown and its impact on housing programs serving Wyoming. The WCDA provides low-interest single family mortgages and education in Wyoming to help people buy and retain their homes, but the WCDA receives no state funding. The WCDA does administer five major federal housing and community development programs.

The shutdown has resulted in the U.S. Department of Housing and Urban Development operating with limited staff, though many core housing programs continue to function, Volzke said. FHA single-family loans continue to be endorsed and processed, and the FHA Connection system remains operational with automated functions continuing. 

However, manual underwriting, reverse mortgages (HECM) and non-direct endorsement loans requiring FHA assessment are either delayed or not being processed during the shutdown.

HUD continues making rental Housing Assistance Payments under previously obligated Section 8 contracts through at least mid-November, as long as funding remains available, Volzke said.

The shutdown has also impacted USDA Rural Development programs.

“It is our understanding that no new rural housing loans, grants, or loan guarantees (are) being committed during the shutdown,” Volzke said.

Conventional mortgage loans backed by Fannie Mae and Freddie Mac are largely unaffected, as these entities do not rely on congressional appropriations, he said. But the longer the shutdown lasts, the more lasting effects experts anticipate.

“We are very concerned about things slowing down, (about) the uncertainty in the market and that if this continues past 30 days, that you could see closings that just are not able to happen,” McGahn said.

This story was published on Oct. 28, 2025.