How Government Shutdowns Disrupt FHA, VA, and USDA Loans
- Alexi Mencio
- Oct 4, 2025
- 3 min read
The October 2025 government shutdown has created uncertainty across many industries — and the mortgage market is no exception. While conventional loans continue with minimal disruption, federally backed programs like FHA, VA, and USDA loans often feel the greatest impact.
These programs are vital for first-time buyers, veterans, rural homeowners, and low-to-moderate income borrowers. But because they rely heavily on federal staffing and agency operations, shutdowns can cause frustrating delays in approvals, verifications, and closings.
At Trust Lending, we’re helping borrowers and brokers understand how the shutdown affects these loans — and how to keep deals moving forward.
FHA Loans During a Shutdown
The Federal Housing Administration (FHA) provides insurance on millions of loans each year, particularly for first-time and lower-income buyers.
FHA continues to endorse loans during a shutdown, but reduced staffing at HUD can create backlogs.
Case number assignments and condo approvals may be delayed, especially for new projects.
Borrowers may also see longer turn times on underwriting reviews that require HUD oversight.
VA Loans During a Shutdown
The Department of Veterans Affairs (VA) plays a direct role in processing VA home loans for veterans and service members.
VA typically continues operating during short shutdowns, but with limited staff.
Certificates of Eligibility (COEs), required for VA loans, may take longer to issue.
VA appraisals — already a known bottleneck in some markets — can slow even further.
Closing timelines may slip if VA offices can’t respond quickly to lender or borrower requests.
USDA Loans During a Shutdown
The U.S. Department of Agriculture (USDA) faces the greatest disruption in a shutdown.
USDA loan guarantees and direct loan programs often halt entirely until funding is restored.
No new USDA loan commitments or conditional approvals are issued.
Borrowers in rural areas may have to pause purchases or refinances until the shutdown ends.
This can be especially challenging in communities where USDA financing is the primary affordable lending option.
What Borrowers Can Do
If you’re applying for an FHA, VA, or USDA loan during a shutdown, here are steps to minimize disruption:
✔ Stay in close contact with your lender. They’ll know which parts of your loan are affected.
✔ Plan for possible delays. Build extra time into closing schedules to avoid last-minute stress.
✔ Have documents ready. Prompt responses help offset delays from federal bottlenecks.
✔ Consider alternatives. In some cases, exploring conventional or other loan types may keep transactions moving.
✔ Ask about rate lock extensions. If your closing is delayed, your lender may extend your lock to protect your rate.
How Trust Lending Supports You
At Trust Lending, we:
Proactively monitor agency guidance from FHA, VA, and USDA.
Communicate clearly with brokers and borrowers about expected timelines.
Help structure deals with contingencies to protect clients against delays.
Explore backup loan options if a shutdown drags on.
Be Prepared, Stay Flexible
Government shutdowns may be temporary, but they can cause real-world disruptions in the mortgage process — especially for FHA, VA, and USDA borrowers. Delays in approvals, appraisals, and loan guarantees are common, and planning ahead is the best way to avoid surprises.
At Trust Lending, our team works closely with clients to ensure deals continue to move forward, even in uncertain times.
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