The much-talked-about possibility of a federal shutdown has now become reality, and its impact is being felt across the real estate market in Northern Virginia. While buyers, sellers, and investors all have questions, there’s both clarity and optimism to share.
Loan Programs: What’s Affected and What’s Not
Conventional financing continues to move forward with business as usual. FHA and VA loans are also being processed—however, federal employees on furlough face unique challenges. Lenders often treat furloughed workers as if they are unemployed, since no current paycheck is being received. Even essential workers who are required to show up without pay are in the same predicament, making income verification difficult.
For buyers under contract or considering entering one, it’s critical to check with the lender immediately. Much of the authority to verify income lies with the underwriter, and practices vary. Some lenders rely on IRS verification forms, which may be stalled. Others may accept recent pay stubs or alternative documentation. Staying close to the lender is key.
On the flip side, some programs, such as USDA loans, are fully halted because the Department of Agriculture is closed, leaving certain buyers stuck mid-process.
Mortgage Interest Rates: A Waiting Game
Another hot topic is mortgage interest rates. While rates have been hovering below 6.4%, they continue to swing day by day—jumping from 6.2% one day to 6.7% the next. Normally, the Federal Reserve relies on government data to guide decisions on the federal funds rate, but with agencies frozen, that data isn’t being produced.
Private entities like ADP are releasing job reports, but the Fed may not base major decisions solely on private data. With the next scheduled meeting at the end of October, uncertainty remains around what information will be available to guide policy. For now, rates are steady, and many in the market are hopeful they stay that way.
Market Energy in Northern Virginia
Despite the shutdown, the housing market in Northern Virginia remains energetic. Recent statistics show more properties under contract than active listings in several neighborhoods, with closed sales in the past 30 days outpacing both.
Open houses have seen strong attendance and lively conversations, reflecting continued enthusiasm from buyers. Energy and optimism are still alive in the marketplace, even just a week into the shutdown.
Opportunities for Investors and Cash Buyers
While the shutdown presents challenges, it also creates opportunities. Investors and all-cash buyers, in particular, may find this to be a strategic moment. With certain loan programs paused and some buyers sidelined, those who are ready to act can step in more competitively.
Final Thoughts
The federal shutdown is creating short-term hurdles, especially for buyers reliant on specific loan programs or those employed by the federal government. But the overall market in Northern Virginia continues to show resilience, activity, and even optimism.
For anyone navigating a real estate decision during this period, the best advice is simple: stay informed, stay connected with lenders, and seize opportunities where possible.
