As of Tuesday night, the federal government officially entered a shutdown. While these events are driven by Congress’s inability to reach agreement on funding, our priority today is to keep you informed about what this means for your business and your clients.

We have received guidance from the agencies and wanted to provide clarity on what this means for your clients who are currently in the process of obtaining a mortgage.

Greatest Areas of Concerns for Your Clients:

• Government Employees: Loans involving furloughed government employees could present added risk if the borrower is downsized after closing but before loan sale.

• Flood Insurance: New policies and renewals through the federal program are unavailable during the shutdown. Private flood insurance options are available and maybe needed to close.

• Verification of Employment (VOE): Some third-party providers may experience interruptions. Guidance has been provided on alternative ways to complete VOEs during the shutdown.

• Social Security Verification: Delays are expected.

• IRS Transcripts: The IRS is continuing essential functions but warns of slower turnaround times.

• USDA Loans: Loans without a conditional commitment may face delays. With the new fiscal year starting October 1, 2025, USDA has not yet indicated whether new commitments will be issued.

What Can You Do to Help Your Clients

• Stay Updated: Follow company updates and reach out to your loan officer for the latest guidance as things might change.

• Set Expectations: Be upfront with your clients about possible delays outside of your control specifically around VOEs, IRS, flood insurance, and USDA loans.

• Offer Options: Point borrowers to private flood insurance and use alternate documentation when allowed.

While the situation may create challenges, remember — you can count on us to keep you informed and supported every step of the way. Reach out to your Key Mortgage loan officer today with any questions about what this means. If you don’t have one yet, reach out to your managing broker and they can help introduce you!