How Is My Home Loan and Sale Affected by the Government Shutdown in Northern NJ?

How does a federal government shutdown impact real estate deals in Bergen County and the surrounding Northern NJ area?

A government shutdown can disrupt the home-buying and selling process—especially when federal services are involved. In flood-prone areas like Bergen County or when using FHA/VA financing, your deal might face delays or complications. Here’s how to stay ahead of potential issues.

Why Northern NJ Real Estate Is Vulnerable During a Shutdown

Northern NJ includes a mix of urban, suburban, and coastal areas—all of which could be affected differently. In Bergen County specifically, a few common deal types are especially at risk:

• Homes in flood zones that require NFIP-backed flood insurance

• Buyers using FHA or VA loans

• New construction or land deals needing federal environmental permits

• Closings with tight deadlines and no room for delays

When the government halts operations, programs like the National Flood Insurance Program (NFIP), FHA, VA, and even the IRS may slow down or pause. That can create hiccups in otherwise smooth transactions.

What’s Most Likely to Be Delayed

If your transaction involves any of the following, it’s smart to prepare now:

• Flood insurance from NFIP – New or renewal policies won’t be issued during a lapse.

• FHA/VA loans – Processing may be delayed due to reduced staffing.

• IRS or SSA verification – Lenders might not be able to confirm income or tax transcripts.

• Environmental approvals – Deals requiring federal permits could be pushed back.

Smart Ways to Protect Your Transaction

Here are 10 ways buyers, sellers, and agents can reduce risk and keep deals on track during a shutdown:

1. Lock in or renew flood insurance early. Consider private policies if available and accepted by the lender.

2. Choose conventional financing when possible to avoid federal delays.

3. Submit financial documents to your lender early.

4. Use flexible contract language that allows for extensions.

5. Double-check that private flood insurance will be accepted.

6. Avoid scheduling closings near shutdown deadlines.

7. Keep communication open with all parties involved.

8. Postpone deals needing federal reviews if possible.

9. Look into assuming an existing flood policy from the seller.

10. Negotiate protective clauses to address shutdown-related delays.

How Bad Could It Get?

For homes not in flood zones and not using federal programs, the impact may be modest. But in Bergen County—where riverside and coastal properties are common—the risks are higher:

• A prolonged shutdown increases the chance of delays.

• Missed deadlines due to slower documentation or funding approvals.

• Buyers or sellers may back out due to uncertainty.

• Even minor disruptions can ripple out to affect the broader local market.

What You Can Do Right Now

If you’re in the middle of a deal or planning to list or buy soon:

• Discuss possible shutdown-related risks with your agent.

• Ask your lender whether your financing relies on federal agencies.

• Confirm the flood insurance status of the property.

• Prepare for delays—both logistically and contractually.

With early action and steady communication, you can still move forward with confidence.

Final Takeaway

A government shutdown doesn’t have to derail your plans—but it can cause setbacks. If you’re buying or selling in Northern NJ, especially Bergen County, being informed and proactive makes all the difference. Work with an experienced local agent who knows how to navigate changing conditions and protect your interests.

Schedule a Consultation Today

Connect with Scott Selleck of The Selleck Group, KW City Views Realty, your Northern NJ REALTOR®. Call 201-970-3960 or email [email protected] to get the guidance you need to protect your interests, close with confidence, and keep your transaction on track.