The government shutdown, which began October 1, is disrupting parts of the U.S. housing market, raising concerns about rural home loans and flood insurance coverage.
While most federal housing programs continue to operate, delays are already evident in areas that depend on direct government involvement.
"Health care and insurance rates are going to go up dramatically starting tomorrow," Sen. Chris Coons tells @jmathieureports on "Balance of Power" https://t.co/SM6APXmt7e pic.twitter.com/jrZNvLjELV
— Bloomberg TV (@BloombergTV) September 30, 2025
The National Flood Insurance Program, run by FEMA, has halted new policies and renewals, creating risks for homeowners in flood-prone regions. Without coverage, thousands of pending home sales could stall, particularly in high-risk areas.
Democrats on the House Financial Services Committee warned that over 1,300 closings per day may be threatened.
Rural homebuyers are also affected, as the U.S. Department of Agriculture suspended new loans for low- and middle-income families.
As a government shutdown hinging on Affordable Care Act tax credits looms, most managed care insurers have already priced in the potential loss of the subsidies, according to analysts.
— S&P Global (@SPGlobal) October 2, 2025
The #US federal government could face a #shutdown Oct. 1 as lawmakers attempt to pass a budget… pic.twitter.com/5a3qDdoe2r
Some relief comes from Fannie Mae and Freddie Mac, which continue operations, along with ongoing Section 8 rental assistance payments. Still, analysts warn the longer the shutdown drags on, the greater the damage to housing stability.
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