How is the October 2025 government shutdown impacting the real estate market and government-backed loan programs like FHA, VA, and USDA?

While the federal shutdown is slowing some parts of the housing market, it’s not bringing everything to a halt. Here’s what’s actually happening, and what you can do if you’re buying or selling a home in today’s Wichita Falls housing market market.

The Government Shutdown: What’s Going On

As of early October 2025, the federal government has officially shut down after Congress failed to pass a new funding bill. While essential services are still operating, many housing-related departments are either running with limited staff or are temporarily paused.

For real estate, that means loan processing delays, potential closing disruptions, and uncertainty in rate movements — but not a total standstill.

FHA, VA, and USDA: What’s Still Moving (and What’s Not)

FHA Loans

The Federal Housing Administration (FHA) is still endorsing new single-family loans, but with reduced capacity.

• Expect slower turnarounds where staff review is required.
• Certain specialized products (like reverse mortgages) are typically on hold.

In other words: FHA buyers can still close, but lenders may experience longer processing times.

VA Loans

The Department of Veterans Affairs (VA) is continuing to process VA home loans during the shutdown.

• Most functions are funded and operational.
• Appraisals, underwriting, and certifications are still moving — though some administrative tasks may be delayed.

For veterans and active-duty buyers, this means your home purchase or refinance can likely stay on track.

USDA Loans

The U.S. Department of Agriculture’s Rural Development program, however, is essentially paused for new loans.

• New USDA direct and guaranteed loans are not being approved during the shutdown.
• If a lender already has a valid conditional commitment, they may choose to close “at lender risk” — but most will wait for official guarantees to resume.

This impacts rural buyers the most, including many across North Texas and Wichita County, where USDA loans are a common financing option.

The Hidden Bottlenecks Affecting All Loans

Even if your loan type isn’t directly paused, some common shutdown-related issues can ripple across all transactions.

• Flood Insurance: The National Flood Insurance Program (NFIP) has lapsed. No new or renewed NFIP policies can be issued, which means properties in FEMA flood zones can’t close unless a lender accepts a private flood insurance policy.
• IRS Transcripts (Form 4506-C): The Income Verification Express Service (IVES) is operating inconsistently. Borrowers who are self-employed or need IRS verification may face longer approval timelines.
• Data Delays: Government data reports — like jobs and inflation — are being delayed. That can impact how the Fed views interest rates, creating more short-term volatility in mortgage pricing.

What’s Happened in Past Shutdowns

To put this in perspective, past government shutdowns offer a clear pattern:

• Short shutdowns cause temporary slowdowns, not long-term damage.
• Longer shutdowns (like 2018–2019) led to loan-processing bottlenecks, particularly with USDA loans and IRS transcript delays.
• The National Association of REALTORS® estimates that when the NFIP lapses, about 1,400 real estate transactions per day are delayed or canceled.

So far, the 2025 shutdown appears similar — noticeable inconvenience, but not systemic collapse. The key variable will be how long it lasts.

What It Means for Buyers and Sellers in Wichita Falls, TX

In Wichita Falls and other parts of North Texas, the most immediate impacts are:

• Rural buyers using USDA financing are seeing the biggest disruptions.
• FHA and VA borrowers can still move forward but may need to extend closing timelines.
• Conventional buyers aren’t directly affected, but lender pipelines may slow slightly due to overall volume shifts.

Local lenders are adjusting by extending rate locks and proactively communicating about documentation needs. Appraisers and title companies are generally still operating as usual, so most transactions will progress — just at a slower pace.

The Bigger Picture: Mortgage Rates and Market Psychology

Interestingly, the market often responds to shutdowns with a mix of rate stability and uncertainty.

• With fewer government data releases, the Fed has less to go on, so mortgage rates tend to hover or rise slightlyduring the shutdown.
• Once government operations resume, rates often stabilize or drop modestly as uncertainty clears.

In the meantime, buyer demand in North Texas remains relatively steady. Limited inventory and consistent job growth in the region continue to support home values.

What You Can Do Right Now

If you’re buying or selling a home during this government shutdown, here are some proactive steps to keep your transaction on track:

1. Confirm Loan Type Early: Ask your lender exactly how the shutdown impacts your loan.
2. Add Flexibility to Contracts: Build in extra time for loan approval or closing contingencies.
3. Secure Flood Coverage Promptly: If your property is in a flood zone, explore private flood insurance options early.
4. Verify Income Documentation: For self-employed borrowers, prepare alternative documentation (profit-and-loss statements, CPA letters, or bank statements).
5. Stay in Communication: Keep your lender, title company, and agent connected. Quick updates prevent delays from snowballing.

The Bottom Line

The 2025 government shutdown is creating temporary friction, not a fundamental market collapse. FHA and VA loans are still processing, USDA is mostly paused, and the NFIP lapse may delay some closings — but real estate activity continues across most of the country.

In Wichita Falls, the market remains resilient. The biggest key right now is patience and preparation — knowing what can move forward and where delays are likely.

Ready to Talk Strategy?

If you’re considering buying or selling during the shutdown — or you just want to know how your loan type might be affected — schedule a quick call. We’ll go over your options, timeline, and what to expect based on your financing and location.