When Uncle Sam Stops Paying the Bills

How the Government Shutdown Is Quietly Wrecking Real Estate

Author

Pablo Ottenwalder
October 24, 2025

Words I like: People love to say - life’s chess, not checkers - but most of them still don’t know how to play.

Pablo’s Perspective:

Let’s talk facts…

When the federal government shut down on October 1st, real estate didn’t just slow down. It got jammed up!

Here’s the truth:

  • FHA and VA loans are still operating, but agency reviews are dragging.

  • USDA loans? Those are basically frozen no approvals until the government’s back online.

  • Flood insurance? The National Flood Insurance Program (NFIP) is paused. That means buyers in flood zones (hello, Florida) can’t close unless they find a private policy and that’s rare.

  • IRS tax credit projects? Like Opportunity Zones or Low-Income Housing Tax Credits are stuck in limbo because federal staff who review and release those funds are furloughed.

  • And remember, real estate makes up roughly 18% of the U.S. economy (per NAR). So when Uncle Sam slacks it’s not just D.C. drama it’s screws the buyers, builders, closers, and cash flow.

The White House Council of Economic Advisers estimates a month-long shutdown could strip $30 billion from consumer spending. (Jesus Christ)


That’s fewer rent checks, slower flips, and contractors waiting on payments and if you deal with contractors you know they want to get paid immediately!

Section 8 Landlords

  • Payments are still going out… for now. HUD and local housing authorities are using previously obligated funds to keep checks flowing. (Had to google this)

  • If this drags on, contracts that need renewals or new funding could face delays meaning landlords might have to float rent payments until HUD reimburses later.

  • You can’t evict tenants just because HUD’s portion is late or try to make them cover the gap federal rules prohibit that. But tenants must still pay their share of rent.

  • Bottom line: if this shutdown stretches too long, Section 8 funding could feel the pain next. Small landlords without reserves will feel it first…

How’s the Real Estate market in your city doing? I would love to hear from other investors!

If you’d like to watch my journey and learn from all my mistakes take a look below!

**We currently have 4,534 subscribers the goal is 5k before the New Year!

Did you know? 💡 

Even when the government “shuts down,” Congress still gets paid. (Yeah…)

-Pablo