Shutdown of the United States federal government on 1 October 2025. Picture this — it’s already having a disproportionate impact on several sectors, including the entire commercial real estate asset class. As the government temporarily shuts down operations, we’ve put together a short list of ways to prepare virtually. This delay has halted vital services and processes, leaving investors, lenders, and homeowners in limbo.
The shutdown has already had one immediate effect, as the Bureau of Labor Statistics will have to delay the September monthly employment report. This lag time undercuts important labor market intelligence. This delay robs economists and analysts alike of valuable insights into the state of the labor market. Without this information, they cannot make informed choices in the public or private sector.
Furthermore, essential mortgage processing services could be delayed or even entirely halted among multiple federal agencies. The Federal Housing Administration (FHA), the Department of Veteran Affairs (VA), and the Department of Agriculture (USDA) have each recently indicated they may be delaying their mortgage processing. For them, this shutdown would be devastating. This sudden disruption would actually put thousands of home sales in jeopardy, with many potential buyers and sellers now stuck in uncertainty.
The impacts of the federal flood insurance program shutdown are being acutely felt. As such, it’s currently unable to issue any new policies. This troubling evolution threatens property owners with homes and businesses in flood-prone areas who depend on this insurance to maintain their economic well-being.
Additionally, the Internal Revenue Service (IRS) will see delays in processing tax transcripts and income verification documents as a result. These slowdowns are very difficult for consumers and businesses to plan around, and make lending decisions more difficult.
Ran Eliasaf, the founder and managing partner of Northwind Group, the parent company of Northwind Resources, explained how the shutdown affected his business. He thinks it would have a huge effect on where investors choose to put their money. He stated, “Investors in general and lenders specifically look for stability, and when there’s political instability, it always creates more caution about making investment decisions and lending.”
He further elaborated on the risks associated with political uncertainty: “We think the biggest risk to underwrite is political risk. It’s true for the federal level, like government shutdown, and it’s true for local, like the New York City mayoral election.”
The shutdown impacts our economy much deeper than the real estate industry. Its effect has rattled the entire Washington, D.C. tourism industry too, including the National Cherry Blossom Festival. The activation of the National Guard and federal troops further intimidated potential visitors. This economic blow is greatly affecting local businesses, who rely on tourism dollars to stay afloat. Christine Cooper, chief U.S. economist and managing director at CoStar, highlighted the potential fallout for small retailers: “Think about all the small retailers and coffee shops.” She explained that because they operate on extreme margins, they are more susceptible to disruption when they lose these customers. If they can’t afford it, then within fairly short order you’ll see some major shutdowns.
The 2019 government shutdown was a major turning point in that regard. Now it’s the historical reference point for today’s events. At the same time, the real estate market was subject to just as horrific disruptions. This pattern could play out again if the shutdown persists.
Scenes from Washington, D.C., show just how tense and angry the mood was during the threatened shutdown. The National Mall completely devoid of people at sunset. As a man treadmill’s past, his silhouette cast by the Capitol’s dome light coming off the windows. This kind of imagery highlights the eerily calm atmosphere in a place normally painted with a much more frenetic brush.
Eliasaf warned that delays in financing applications are likely: “I think [for] HUD financing, the queue will get longer. Applications will not be processed.” He added, “It’s going to impact dealmaking. Definitely anybody that’s negotiating a GSA lease, a government-backed lease, from the VA to even securing HUD financing is going to run into some issues right now.”