How Long Will It Take the Housing Market to Recover After the Government Shutdown?

With the federal shutdown finally over, buyers and sellers are asking how long the housing market will take to rebound, especially for FHA, VA and USDA loans. The short answer is that recovery will happen, but each loan type returns to normal at a different pace.

What Happened During the Shutdown

Housing related services slowed down. FHA and VA continued operating but with reduced capacity. USDA loans faced heavy disruption because many of their services pause completely. Flood insurance processing slowed, and IRS income verification delays caused underwriting bottlenecks. These issues stacked up and created a temporary drag on closing timelines.

Expected Recovery by Loan Type

VA Loans: 1 to 3 months

The VA handles shutdowns better than most agencies. Operations continue but slower. Once staff return and backlogs clear, VA loans normalize relatively quickly.

FHA Loans: 2 to 4 months

FHA deals with case numbers, condo approvals and regional staffing gaps. Delays will ease as HUD offices work through the backlog.

USDA Loans: 3 to 6 months

USDA faces the largest delays because new guarantees and approvals may halt during a shutdown. Recovery is slower once operations resume, especially in high volume regions.


What Buyers Should Expect

Buyers using FHA or USDA should plan for slower processing. VA buyers may see fewer delays but should still expect extended timelines. Buyers who need to close quickly may want to discuss whether a conventional loan is an option.

What Sellers Should Expect

Financing delays are a procedural outcome, not a sign of a weak buyer or a failing deal. Sellers should allow a little extra flexibility with closing dates but can take comfort that demand remains strong.

Impact on Fort Wayne and Surrounding Markets

Our region uses fewer USDA loans and has minimal flood zone overlap, which helps us recover faster than other parts of the country. FHA and VA buyers remain active, and most local lenders are already clearing out backlogs.

Bottom Line

The housing market is resilient. A shutdown causes temporary delays, not lasting damage.

VA usually returns to normal within 1 to 3 months. FHA takes about 2 to 4 months. USDA may take 3 to 6 months or longer.

If you are buying or selling and want to understand how these timelines affect your plans, I can walk you through it.



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