"Flood insuranceis one big way. The National Flood Insurance Program can't issue new policies during a shutdown, complicating thousands of home sales in flood zones. Lenders do have work-arounds to enable sales to continue, but some of these can put buyers in a risky position. Government-backed loans like those from the Federal Housing Administration and Veterans Affairs continue but move slower. Meanwhile, rural housing loans through the USDA often pause entirely."
"A government shutdown doesn't stop the housing market-but it can definitely slow things down. From delaying closings to shaking buyer confidence, even a short shutdown causes ripple effects that can reach your front door. When Washington gridlocks, it doesn't just stay in DC-it filters down to everyday buyers, sellers, and homeowners across the country. A shutdown begins when Congress fails to pass a funding bill, forcing many federal agencies to partially close. Some essential services continue-air traffic keeps moving-but critical housing programs slow way down or stop completely."
A government shutdown begins when Congress fails to pass a funding bill, forcing many federal agencies to partially close. Some essential services continue, but critical housing programs slow or stop. Paperwork accumulates, closings delay, and buyer confidence weakens. The National Flood Insurance Program cannot issue new policies, complicating sales in flood zones. Lenders may use workarounds that increase buyer risk. FHA and VA loans continue but operate more slowly, while USDA rural housing loans often pause. Prolonged shutdowns can threaten rental assistance and strain rural housing affordability and construction.
Read at SFGATE
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