Originally published in the October 10, 2025, issue of AI’s Appraisal Now
Reprinted with permission from AI

The partial shutdown of the federal government is creating uneven impacts across the mortgage and housing landscape. While some loan programs continue operating, others have slowed or paused entirely—creating uncertainty for lenders, appraisers, and borrowers alike.

FHA: Operating on a Limited Basis

The Federal Housing Administration continues to endorse loans through its Direct Endorsement program, allowing lenders to process FHA-insured loans they underwrite themselves.

However, FHA has paused loans requiring direct FHA underwriter review, and will not endorse Title I property-improvement loans or Home Equity Conversion Mortgages (HECMs) during the shutdown.

The agency is still processing certain manual endorsement actions—including case number cancellations, reinstatements, transfers, and releases from hold queues (including condominiums)—but staffing limitations are expected to slow response times.

The FHA Resource Center remains available to answer questions, though responses that require HUD staff escalation may be delayed.

VA: “Business as Usual”

The Department of Veterans Affairs has assured appraisers and lenders that it’s “business as usual” during the shutdown. The VA’s Loan Guaranty program is continuing operations, and VA appraisal assignments are expected to proceed normally.

Still, some appraisers note that payment delays could arise if lenders or AMCs face internal disruptions.

USDA: Rural Housing Loans Paused

The U.S. Department of Agriculture has suspended new commitments under its Single-Family Housing Guaranteed Loan Program, effectively putting rural housing purchases on hold until funding resumes.

Loans that were already obligated before the shutdown may continue toward closing, but new guarantees will not be issued. The pause could delay purchase transactions in rural markets that depend on USDA financing.

NFIP: No New or Renewal Flood Policies

The National Flood Insurance Program (NFIP) cannot issue new or renewal flood insurance policies during the shutdown.

Existing policies remain in force, and claims are expected to be paid—though closing delays are likely in flood-prone areas where new coverage is required. Industry sources caution that a prolonged lapse could also affect the timing of claim payments.

Multifamily Lending: Some Closings Continue

For multifamily transactions, the impact varies by program:

• FHA Multifamily (MAP, 221(d)(4), 223(f), etc.) loans may close if a Firm Commitment was issued before the shutdown. No new commitments will be issued. Construction draws and escrow releases can occur at the lender’s risk, subject to post-review when HUD staff return.
• Section 8 and other rental assistance contracts are expected to continue while existing funds last, but could face delays if the shutdown extends.
• Fannie Mae and Freddie Mac multifamily programs continue normally, as they are not funded through annual appropriations.
• USDA Section 538 rural rental guarantees are on hold, consistent with other USDA programs.

IRS, Tax Court, and Federal Judiciary

The IRS will continue normal operations, drawing on Inflation Reduction Act funds that remain available through 2031. Filing and payment deadlines still apply, but taxpayer correspondence and audits could slow if the shutdown persists.

The U.S. Tax Court remains open, with its electronic filing system (DAWSON) fully operational.

The federal court system—including district, appeals, and bankruptcy courts—will remain open through mid-October, using existing fee balances and carryover funds. After that, courts may move to “essential operations only,” which could delay civil cases.

Land Acquisition and Easement Programs

Most discretionary land-acquisition and easement programs at the USDA and Department of the Interior are paused, since they depend on annual appropriations.

Projects funded by non-lapsed sources (such as mandatory Land and Water Conservation Fund dollars) may proceed, but federal reviews and closings are likely to be delayed due to furloughs.

Appraisers involved in NRCS easements, Forest Legacy, or Interior land transactions should expect schedule disruptions and limited federal support until full staffing resumes.

Practical Implications for Appraisers

• VA assignments should continue normally.
• FHA work may slow where federal staff involvement is required.
• USDA and NFIP-related transactions will likely stall until appropriations are restored.
• Multifamily and land easement appraisals could face documentation and payment delays tied to unavailable federal reviewers.
• Appraisers may also encounter cash-flow strain if clients—including AMCs or lenders—delay payments tied to affected programs.