TL;DR: Conventional mortgages generally do not freeze during a federal shutdown because Fannie Mae and Freddie Mac continue operating. FHA and VA single-family programs usually keep running (often with reduced capacity), while USDA-guaranteed loans commonly pause new guarantees. Rates don’t move just because of a shutdown, but delayed economic data can add uncertainty for markets and the Fed. The Federal Reserve still meets even during shutdowns.
No. Fannie Mae and Freddie Mac aren’t funded by annual appropriations, so they remain open and continue purchasing/guaranteeing conforming loans. Lenders may adjust some processes (e.g., handling of third-party verifications) to keep pipelines moving, but this is operational friction—not a freeze. In the current cycle, IRS operations are slated to remain available, which further reduces the risk of transcript-related delays.
Most core FHA and VA single-family functions continue during a shutdown, though some activities slow when agency staff or systems are limited. That means turn times can lengthen, and a few product types or edge cases may be delayed. Expect normal program rules (like flood insurance requirements) to remain in force.
Historically, USDA Single-Family Housing Guaranteed loans see the greatest disruption. New guarantees often pause during a funding lapse. Loans with a valid pre-shutdown conditional commitment may still close depending on investor policy and any updated USDA guidance.
There’s no automatic spike. Mortgage rates mostly follow mortgage-backed securities and the 10-year Treasury. Shutdowns can delay key government data (jobs, inflation, retail sales), which clouds the outlook and can nudge volatility. But the direction of rates hinges more on overall growth/inflation expectations than on the shutdown itself.
Yes. The Fed is independent and continues to meet. A clear example is November 15, 1995, when the FOMC met during an active shutdown. The bigger practical issue for the Fed is missing data, which can shape the tone of policy discussions—but the meeting schedule itself doesn’t stop.
Ask your lender how they’re handling verifications and any temporary documentation alternatives.
Build timeline buffer for government-backed loans (FHA/VA/USDA), appraisals, and endorsements.
Confirm flood coverage and any other insurance requirements early.
For USDA, clarify whether you already have a valid conditional commitment and what your investor will accept.