The same broker described current borrowers as “stuck in limbo”, with some at risk of homelessness if leases expire before closing. “It’s a sad reality,” he said, warning that the sudden stoppage of USDA underwriting decisions would send shockwaves through the communities most reliant on the programme.
Operational friction across the pipeline
While the USDA programme faces outright stoppage, other parts of the mortgage system continue to function. Social Security verification and most wage-income checks are proceeding, and the Department of Housing and Urban Development has confirmed that FHA and Ginnie Mae support will not lapse. Yet IRS operations are curtailed, creating problems for transcript-based verifications. Wage earners may in some cases rely on investor-accepted alternatives, but self-employed borrowers typically cannot advance without full IRS records.
“It’s a fantastic programme,” the broker said of USDA lending, “helping people achieve homeownership where it may not otherwise be possible. But now, their dreams are on hold. Who knows if their lease is up and they’ve had to push back closing? They can’t get into their home because they can’t get an underwriting decision.”
Closing strategies for lenders
Mortgage professionals are urged to take a defensive approach to pipeline management:
- Submit early, complete files to reduce exposure to conditional commitment delays.
- Rely on existing commitments where possible, since lenders can often close against them if remaining conditions do not require fresh agency intervention.
- Build time buffers into contracts, appraisals and verification steps to absorb interruptions.
- Plan rate strategy carefully, with longer locks or extension provisions, as postponed federal data releases could stoke volatility.
“Anything that you need to reach the government for, if someone is not in the office or someone is on furlough, that loan may have an issue,” Justin Demola, president of Lenders One, told CNN. The National Association of Home Builders has likewise warned that even small service disruptions may ripple through approval chains.