A quarter-point Fed cut is usually helpful for borrowers. But with the federal government now shut down, parts of the housing system are operating with constraints. In Florida, the biggest near-term pinch point is flood insurance documentation for homes in FEMA-mapped areas.

What’s actually happening with flood insurance

During this shutdown, the National Flood Insurance Program (NFIP) has temporarily lapsed. Existing flood policies remain in force and claims can be paid, but new NFIP policies and most renewals can’t be issued until Congress restores authority. For purchases that require flood coverage, that can create delays, not automatic deal kills. AP News+1

Florida sees more impact than most because many lenders require proof of flood insurance in FEMA Special Flood Hazard Areas. In a previous lapse (2010), analysts estimated about 1,400 sales per day were delayed or canceled nationally—useful context for why real estate pros watch NFIP closely, not a forecast of what will happen now. AP News

Mitigations and workarounds (why this isn’t doom and gloom)

• Private flood insurance: Some lenders accept private flood coverage that can be placed when NFIP issuance is paused. Acceptance and pricing vary by lender and file, so it’s a case-by-case solution. CBS News
• Deferrals in limited situations: Florida’s state-backed Citizens Property Insurance is temporarily deferring required flood documents until NFIP resumes, with a short post-resumption window to supply them. That doesn’t apply to every transaction, but it’s a concrete example of flexibility in the market. Public

Other areas where we may see delays (not stoppages)

• IRS transcripts (4506-C/IVES): In past shutdowns, transcript fulfillment slowed or paused. Agencies and the GSEs allow lenders to close and cure transcripts after the government reopens, subject to lender overlays. Expect variability, but this is generally a timing issue. National Association of REALTORS®+1
• FHA/VA/USDA: These programs often continue essential functions with reduced staffing. That can mean longer turn times rather than blanket shutdowns. Your mileage will vary by program and lender capacity. National Association of REALTORS®+1

Where the Fed cut fits in

The Fed’s quarter-point cut is a potential tailwind for financing costs, but mortgage rates follow market forces beyond the Fed funds rate. In short: the rate backdrop could help buyers, while operational frictions from the shutdown may slow a subset of files. Net effect: some transactions will need a little more calendar and coordination, not a rewrite of everyone’s plans.

Practical guidance for Florida buyers and sellers

1. Check flood-zone status early. If flood coverage is required, talk to your lender and insurance agent upfront about options (NFIP vs private) and timing. CBS News
2. Ask about lender flexibility. Many lenders have playbooks for transcript cures and shutdown contingencies (and some accept private flood). Policies vary—get your file-specific answer. Fannie Mae
3. Build in buffer time. A short extension can save a deal. Make sure contract dates and rate locks reflect today’s reality.
4. Keep the team synced. Lender, title, insurance, and agent should be in a single loop so documents land in the right order without last-minute scrambles.
5. Stay measured. Historically, shutdown effects are temporary; activity resumes quickly when agencies reopen. The goal is to keep your transaction ready, not rushed. Stratmor Group

Bottom line

We’re not calling for crashes or cancellations across the board. The current NFIP lapse can delay certain Florida closings that require flood coverage, and federal staffing limits may slow some loan processes. But there are workarounds, and professionals across the ecosystem are using them right now to keep deals moving. With a little flexibility and clear communication, most transactions can navigate this period and close when the lights are fully back on. AP News+2Public+2