Quick Answer: Most New Jersey closings keep moving during a federal shutdown, but four kinds of deals can stall: homes that need new National Flood Insurance Program policies, FHA, VA and USDA loans, loans that rely on IRS income verification, and deals waiting on federal permits. The NFIP lapsed from October 1 to November 12, 2025, and the Congressional Research Service reports it is currently authorized only through December 11, 2026. If your deal fits one of those categories, lock in coverage and paperwork early and build extension language into the contract.
By Scott Selleck, KW City Views Realty | November 10, 2026
I recorded this video during the 2025 shutdown, when Bergen County buyers and sellers were calling to ask whether their deals would still close. The question comes back every time federal funding runs short, and with flood insurance authority set to expire again on December 11, 2026, it is worth having the answer ready.
Which home sales can a federal shutdown delay?
Deals that depend on a federal agency doing something before closing.
- Homes in flood zones that need a new NFIP policy. When NFIP authority lapses, new policies cannot be issued. Lenders require flood insurance on many loans in high-risk zones.
- FHA, VA and USDA loans. Processing can slow when agency staff are furloughed.
- Loans that need IRS transcripts. Lenders often verify income through the IRS, and that step can back up.
- Land or development deals waiting on federal environmental reviews or permits.
Watch at 0:50 the deals most at risk
What happens to flood insurance when the NFIP lapses?
Existing policies stay in force; new ones stop.
The Congressional Research Service explains that policies written before a lapse continue to the end of their one-year term, and FEMA keeps paying claims as premium money comes in. What stops is the ability to issue new policies. The same report notes that during the October to November 2025 lapse, some lenders suspended their flood insurance requirement and others did not. A buyer without coverage could not close with a lender that still required it.
That matters in towns along the Hackensack River and the Hudson waterfront, including parts of Edgewater. I cover the flood-zone side of selling in more detail in selling a home in a flood zone near the Edgewater waterfront.
Under contract, or about to be, on a home in a flood zone or with an FHA or VA loan? Let us check your dates against the December 11 deadline now. Request an appointment in the Meet with Me section below, or call (201) 970-3960.
How do you protect a closing during a shutdown?
Move the federal steps to the front and give yourself room at the back. Watch at 1:50.
- Bind flood insurance early. If the home is in a flood zone, get the policy in place as soon as you are under contract. Ask your lender whether private flood insurance is acceptable as a backup.
- Consider conventional financing. If you qualify, it removes the FHA, VA or USDA agency step.
- Send income documents up front. The sooner your lender has what it needs, the less an IRS backlog can hurt you.
- Write in flexibility. Ask your attorney about contract language that allows a short extension for federal delays.
- Stay in contact. Your loan officer, title company, attorney and agent should be comparing notes weekly.
Check a property's flood zone on the FEMA Flood Map Service Center before you write an offer, not after. Flood insurance costs vary by property, elevation and carrier. Get a written quote from your carrier or a licensed insurance agent.
By the Numbers
- NFIP lapse during the 2025 shutdown: October 1 to November 12, 2025 (Congressional Research Service, IN10835, September 2026)
- NFIP current authorization expires: December 11, 2026 (same source)
- NFIP borrowing authority during a lapse: drops from $30.425 billion to $1 billion (same source)
- Existing NFIP policies during a lapse: remain in force through their one-year term (same source)
The Bottom Line
A shutdown does not usually end a deal, but it can blow a deadline. If your closing touches flood insurance or a government-backed loan, front-load those steps and give the contract room to breathe.
Frequently Asked Questions
Can I close on a house during a government shutdown?
Usually yes. Delays hit mainly deals that need a new NFIP flood policy, an FHA, VA or USDA loan, IRS income verification, or a federal permit.
Can I buy flood insurance during an NFIP lapse?
Not a new NFIP policy. Private flood insurance may be available, and some lenders accept it. Ask your lender before you rely on it.
When does the National Flood Insurance Program expire?
The Congressional Research Service reports it is authorized through December 11, 2026, unless Congress extends it.
Meet with Me
Request an appointment or call me. Cell: (201) 970-3960 | Office: (201) 592-8900.
About Scott Selleck
Scott Selleck leads The Selleck Group at KW City Views Realty in Fort Lee. Licensed since 1993. Over 500 transactions closed.
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Scott Selleck | The Selleck Group
KW City Views Realty | Licensed since 1993 | Over 500 transactions closed
SRES® (Seniors Real Estate Specialist®) | e-PRO®
2200 Fletcher Avenue, Suite 502, Fort Lee, NJ 07024
Cell: (201) 970-3960 | Office: (201) 592-8900
[email protected] | SelleckSellsNJ.com
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