The mortgage industry's fortunes are closely tied to a number of public agencies, and lenders will likely see originations slow if the political impasse in Washington shuts the government down at midnight.
But the severity of its impact on the mortgage market will depend on how long it lasts.
The Department of Housing and Urban Development does "not expect the impact on the housing market to be significant, as long as the shutdown is brief," according to a section of its website addressing the potential impacts of a shutdown.A shutdown in 2013
continued for 16 days, and the Federal Housing Administration continued to insure single-family loans for the duration.
However, "with each day the shutdown continues, we can expect an increase in the impacts on potential homeowners, home sellers and the entire housing market."
"A protracted shutdown could see a decline in home sales, reversing the trend toward a strengthening market we've been seeing," according to HUD.
Most endorsements of certain Federal Housing Administration loan products will continue but could slow as a result of the shutdown. However, certain specialized products will not be available due to a lack of statutory authority to continue originating them.
Whether the shutdown will delay loans in the pipeline from closing will depend on whether other aspects of the government shutdown affect lenders' ability to verify borrower information and continue processing mortgages.
In addition to impacting the FHA, the shutdown could affect the mortgage industry by disrupting some functions of the Internal Revenue Service and the U.S. Department of Agriculture that affect lending, as a similar one in 2013 did.
But other government-related entities with close ties to the mortgage industry came through in 2013 with little disruption or no disruption to operations, and are expected to again.
Here's a look at what will happen at five federal agencies that support the mortgage industry if the government shuts down.