BALTIMORE — Vital housing programs in Maryland could hit big speed bumps as a result of the federal government shutdown according to Maryland Realtors.
“Each day the shutdown continues, uncertainty grows for Maryland families trying to buy or sell a home,” said Maryland Realtors 2026 President Denise Lewis. “While our industry remains resilient, extended disruption to federal housing programs could delay closings, limit access to flood insurance, and create financial hardship for thousands of households.”
The organization says during a lapse in government funding the National Flood Insurance Program (NFIP) can't renew or issue new flood insurance policies. Current policies will remain intact until their expiration dates, and claims will continue to be paid while funds last.
Policies, however, can still be transferred from sellers to buyers during a lapse, and most lending regulators have provided flexibility to support transactions. There are also private market flood insurance options during the shutdown.
Additionally, new direct and guaranteed loans could face closing delays during a shutdown.
Disbursements on existing construction loans continue, but rental assistance and loan servicing are extremely limited until the government reopens.
The Department of Veterans Affairs (VA) is one government agency that will proceed in guaranteeing home loans during a shutdown, allowing lenders to process applications. Yet, reductions in staff may slow appraisals, approvals, and the issuance of certificates of eligibility.
The big picture:
A lapse in the NFIP would leave millions of Americans at risk during hurricane season and disrupt real estate transactions across more than 20,000 communities nationwide.
· Nearly every U.S. county (98%) has experienced a major flood disaster in the past two decades.
· Just one inch of floodwater can cause an average of $25,000 in damage.
· Without NFIP coverage, families must rely on limited federal disaster aid.
· The National Association of REALTORS® estimates that an extended NFIP lapse could impact 1,400 home sales per day nationwide.
Such a disruption would put American homes, businesses, and communities at significant risk and should be avoided.
Impact on Maryland
With 3,190 miles of coastline, Maryland ranks 10th in the nation for total shoreline exposure.
· Estimated number of home sales at risk: 452 per month (15 per day)
· Estimated economic impact: $756 million in lost local income annually
If the Shutdown Lasts Two Weeks
A short-term shutdown would likely cause transaction delays rather than cancellations, with most buyers and sellers in non-flood zones able to close on schedule. However, flood-zone sales could stall temporarily due to NFIP’s lapse, and USDA-backed loans may pause until normal operations resume.
Maryland’s real estate industry could experience a short-term slowdown of approximately 150 home sales statewide, based on historical data—representing several million dollars in deferred local income and economic activity.
If the Shutdown Lasts One Month
A month-long shutdown would create a backlog in loan approvals, flood insurance issuance, and property closings, particularly in coastal counties.
· Roughly 450 home sales per month could be delayed or lost.
· More households would turn to private flood insurance, often at higher cost.
· Reduced consumer confidence—especially among the state’s large population of federal employees—could dampen housing demand and local spending.
The resulting economic loss could exceed $60–70 million in local income for that month alone.
If the Shutdown Extends Longer
An extended shutdown would have critical effects across Maryland’s housing market and economy.
· NFIP funding could be depleted, delaying claim payments.
· USDA and FHA loan pipelines could freeze.
· Lenders may tighten credit standards or defer closings in flood-prone regions.
· Local governments could see lower transfer-tax and recordation-fee revenues.
An extended lapse could imperil thousands of transactions statewide and cost communities hundreds of millions in local income. Rural and coastal areas would face the most significant challenges.
Maryland REALTORS® says it remains committed to ensuring that consumers, property owners, and real estate professionals have access to accurate, timely information during periods of federal uncertainty.
Consumers seeking guidance are encouraged to contact their local REALTOR® for assistance navigating the current conditions and exploring available options.
