A Practical Checklist for Federal Employees
Prepared by Doma Loans, Inc.
(Data sources: Zillow Research, Mortgage Bankers Association, Reuters, AP, Real Estate News, MBA White Paper, Oct 2025)
1️⃣ What’s Happening
As the federal government shutdown enters its fourth week, hundreds of thousands of federal workers are furloughed or working without pay.
That uncertainty ripples into the housing market — particularly for employees trying to buy, refinance, or close on a home.
Federal agencies that underpin mortgage lending — such as the FHA, VA, USDA, and NFIP — are operating with limited staff or halted programs, leading to loan delays, stalled flood-insurance renewals, and tougher income verification.
Zillow estimates that more than 2,500 mortgage originations per workday are at risk of delay due to the shutdown. MBA’s October 2025 analysis found that roughly one in five government-backed loans now faces verification bottlenecks.
2️⃣ Before You Apply
✅ Gather complete documentation.
Have recent pay stubs, W-2s, bank statements, and asset proof ready in case IRS or SSA systems are delayed.
✅ Clarify your employment status.
Ask your agency or HR department to provide written confirmation of furlough or “excepted” status and expected back-pay date.
✅ Ask lenders about alternate verification.
If IRS 4506-T or SSA SSN checks are unavailable, some lenders can use manual or vendor-based substitutes.
✅ Check program exposure.
If applying for FHA, VA, or USDA loans, ask whether new case numbers or commitments are being issued during the shutdown.
✅ Budget extra time.
Allow 1–2 weeks of flexibility on closing timelines in case agency systems or flood-insurance approvals are delayed.
3️⃣ During the Loan Process
✅ Stay in close contact with your lender and realtor.
Confirm your file’s progress weekly; delays may require new rate-lock terms.
✅ Monitor flood-insurance coverage.
If your property is in a flood zone, verify that your lender will accept private flood insurance while the National Flood Insurance Program (NFIP) remains inactive.
✅ Expect slower agency response.
Appraisals, endorsements, and case-number assignments for FHA/VA loans are operating at reduced capacity.
✅ Watch your credit.
Even if pay is delayed, make minimum payments on time to avoid a credit-score dip that could jeopardize approval.
4️⃣ If Your Pay Is Delayed
✅ Inform your lender immediately.
Provide furlough or pay-delay documentation; lenders may offer short-term flexibility or pause income verification.
✅ Ask about hardship or forbearance.
Servicers sometimes allow temporary relief without penalty for verified federal employees.
✅ Tap emergency reserves or savings first.
Avoid high-interest credit to cover mortgage payments; instead, plan withdrawals from liquid reserves.
✅ Stay organized.
Keep all communication in one folder — lender emails, HR letters, and payment receipts — in case verification is required later.
5️⃣ Questions to ask your Lender
- What happens to my application?
- What documentation will you need once government operations resume?
- How are you verifying income for furloughed or unpaid federal workers?
- What happens if my IRS 4506-T or SSA check is delayed?
- Can you honor my rate lock if closing slips due to agency slowdown?
- Are private flood-insurance policies acceptable if NFIP coverage lapses?
6️⃣ Doma Loans Perspective
At Doma Loans, Inc., we understand that a shutdown can make an already stressful home-buying process even more uncertain.
We work with lending partners who can adapt quickly, provide transparent updates, and help you keep your purchase or refinance moving as much as possible.
There are at least a handful of lenders that now require a verifiable document with “you will not be furloughed” from your employer. We have already updated all our borrowers if they were impacted due to shutdown. If your lender has notified you about this, do confirm with them if they can really close the loan.
Our mission is to make mortgage origination fast, smooth, and resilient, as much as we can. We work within the bounds of the markets and ecosystem, and provide timely updates to ensure no or very minimal surprises.
📞 Need help navigating your loan during the shutdown?
Doma Loans, Inc. | Toll-Free 888-658-3662 | domaloans.com | Apply at mortgage.new
🔍 Data & Source Websites
- Zillow Research — “Housing Market Impact of the 2025 Government Shutdown”
http://bit.ly/49lZvup - Mortgage Bankers Association (MBA) — “Implications of the Federal Shutdown on Mortgage Operations”
http://bit.ly/4o8g15V - Reuters — “US Government Shutdown Threatens Home Sales in Flood-Prone Areas”
http://bit.ly/4qq7oFc - Associated Press (AP) — “National Flood Insurance Program Set to Expire, Halting New Policies and Home Loans”
http://bit.ly/47u0zKp - Real Estate News — “How the Government Shutdown May Impact Mortgage Rates”
http://bit.ly/47G4jtg - Rocket Mortgage — “Government Shutdown and Mortgages: What to Expect”
http://bit.ly/47qLA3E - Waterstone Mortgage — “How Homebuyers Can Navigate a Government Shutdown”
http://bit.ly/48O7QH4 - Nolo Legal Guide — “Mortgage Relief for Federal Employees During a Government Shutdown”
http://bit.ly/4qo2FEd - Freedom Mortgage — “Could a Government Shutdown Affect Your Mortgage?”
http://bit.ly/3X1HpX7 - Deseret News — “Shutdown Expected to Slow Mortgage Applications and Home Sales”
http://bit.ly/47xX1qy
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