The federal government partially shut down early Saturday morning, February 1st, 2026, as Congress failed to pass a fiscal year 2026 spending package. For homebuyers mid-transaction, real estate agents managing closings, and anyone planning to enter the market this month—this isn’t just political theater. It’s affecting your deal right now.
Here’s what you need to know to protect your transaction and your clients.
This isn’t a full government shutdown—it’s partial. But the agencies that are affected read like a who’s who of real estate infrastructure:
The good news? Fannie Mae and Freddie Mac continue operating. Conventional loans are less impacted. But if you’re working with FHA, VA, or USDA financing—read on carefully.
FHA loans represent roughly 15% of all mortgages. During the shutdown:
What’s delayed:
What still works:
Action item for agents: Contact your buyers’ lenders TODAY. Ask specifically: “Do you have delegated endorsement authority? Can this FHA loan close during the shutdown?”
USDA home loans—popular in rural and suburban areas across America—face significant disruption. The Rural Housing Service processes these loans, and non-essential staff are furloughed.
What this means:
If your buyer is using USDA financing, you may need to have a difficult conversation about backup plans or timeline extensions.
Veterans Affairs continues as an essential service, so VA loans are less affected than FHA or USDA. However:
Most VA loans should close on time, but build in buffer days just in case.
Here’s what many agents don’t realize: federal document verification affects more than just government-backed loans.
IRS transcripts - Lenders need these to verify income. During shutdowns, IRS processing slows dramatically. If your buyer’s file is missing tax transcripts, expect delays.
Flood zone determinations - FEMA’s flood mapping affects properties nationwide. While most determinations are automated, complex cases requiring manual review face delays.
Federal land records - Properties with federal land adjacent, easements, or other federal touchpoints may face title search complications.
Nobody knows. The January 2025 shutdown threat was resolved in days. The December 2024 situation lasted a weekend. But some historical shutdowns have stretched weeks.
NAR (National Association of Realtors) is actively lobbying Congress to end the shutdown quickly. Their statement emphasizes the “significant impact on real estate transactions and housing markets.”
Smart planning: Prepare for at least 2-3 weeks of disruption, even if it ends sooner. Better to over-prepare than watch a deal fall apart.
Go through every active transaction. Identify which loans are FHA, USDA, VA, or conventional. Prioritize outreach based on risk level.
Don’t assume. Call or email every lender you’re working with and ask:
Your buyers and sellers are seeing shutdown headlines too. Get ahead of their anxiety. Send a brief, professional update explaining:
If a closing is delayed due to the shutdown, document it thoroughly. This becomes important for:
For buyers using FHA or USDA financing, have a preliminary conversation about conventional loan options. Yes, it might mean higher down payments or PMI—but it might also mean actually closing.
For new transactions entering the pipeline, add 2-3 weeks of cushion to closing dates. Include specific language about federal shutdown delays in your contingencies.
Real-time updates matter. NAR’s Real Estate News page and your state association are your best sources for developments.
If you’re mid-transaction:
Immediately: Contact your real estate agent and ask for a status update on your loan type and closing timeline.
This week: Gather any outstanding documentation your lender might need. Tax returns, pay stubs, bank statements—get them submitted now before verification systems slow further.
Ongoing: Watch your email closely. Respond to lender requests within hours, not days.
If you’re planning to buy soon:
Consider timing: If you’re not under contract yet and planning to use FHA or USDA financing, you might wait until the shutdown resolves. Or, explore conventional financing options.
Get pre-approved now: Having full documentation already verified helps you weather delays better than buyers starting from scratch.
Work with an experienced agent: During chaotic market conditions, expertise matters more than ever. An agent who’s navigated shutdowns before knows what contingencies to include and which lenders handle disruptions well.
Speaking of experienced agents—this is exactly the kind of situation where having the right professional in your corner makes the difference between closing on time and watching your dream home slip away.
At Real Estate Agent Near Me, we connect buyers and sellers with experienced local agents who know how to navigate everything from shutdowns to bidding wars. Our agents are vetted for experience, local market knowledge, and—critically—their ability to problem-solve when things don’t go according to plan.
Here’s something the doom-and-gloom headlines won’t tell you: shutdowns sometimes create opportunity for prepared buyers.
Less competition: Buyers with shaky financing or less experienced agents may pause their searches. That means less competition for you.
Motivated sellers: Sellers already under contract become more flexible on timelines and terms when they understand the situation affects everyone.
Rate stability: Market uncertainty often prevents rate increases. The mortgage rates that declined in 2025 aren’t spiking during this chaos.
If you’re a cash buyer or using conventional financing with a strong lender, this might actually be your moment.
When Congress finally passes the spending package, don’t expect instant normalization. Federal agencies face:
Plan for a 1-2 week “hangover period” after the official end before operations truly normalize. Keep that communication flowing with your clients even after good news hits.
The 2026 partial government shutdown is a disruption, not a disaster. Real estate transactions are still happening. Conventional loans are closing. Experienced agents are navigating the chaos daily.
But preparation matters. Communication matters. Having the right team in your corner matters.
If you’re an agent, use this as an opportunity to demonstrate your value. Clients remember who was calm, proactive, and solution-oriented during stressful times.
If you’re a buyer or seller, don’t panic—but do take action. Reach out to your agent today. If you don’t have one yet, find an experienced local professional who can guide you through whatever Congress throws at the housing market next.
Connect with a local real estate expert →
This article reflects information available as of February 3, 2026. For the latest updates on the government shutdown’s impact on real estate, consult NAR.realtor and your state real estate association.
Richard Kastl has been a real estate investor since 2018 and is an entrepreneur with expertise as a web developer, digital marketer, copywriter, conversion optimizer, AI enthusiast, and overall talent stacker. He combines his technical skills with real estate knowledge to provide valuable insights and help people make informed decisions in their property journey.
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