Government Shutdown Mortgage Relief: How Federal Employees Can Protect Their Homes During Payment Delays

With the federal government shutdown now in effect as of October 1, 2025, thousands of federal workers are suddenly facing the immediate challenge of making mortgage payments without their regular paychecks. While you won't lose your home after missing a single payment, falling behind can begin a long downward spiral toward foreclosure. But don't panic: You have rights and options for mortgage relief and foreclosure avoidance. There are specific mortgage relief options and foreclosure protections available to help you get through this temporary financial hardship.

Federal workers experiencing payment difficulties due to a shutdown generally have access to mortgage forbearance programs, emergency loan assistance, and credit protection measures that can prevent long-term damage to their finances. If you can't make your mortgage payment (or think you won't be able to make your payment) because of a government shutdown, you should contact your loan servicer right away to find out if you qualify for payment relief.

Understanding your mortgage relief rights and acting quickly can mean the difference between temporary financial strain and serious consequences like foreclosure. If you're unable to get adequate assistance through your servicer and need to find other sources of income to help you make your payments, you might want to also consider taking out a low-interest loan, cutting expenses, contacting your other creditors, or finding different sources of income to help you get by.

How Long Do I Have Before I Face Foreclosure If I Miss Payments Because of the Shutdown?

In most cases, foreclosure proceedings can't start until you're at least 120 days delinquent. But missing payments can result in fees and credit damage, so act fast.

What Mortgage Relief Options Can Federal Employees Get During a Shutdown?

Most major loan servicers have established protocols specifically for government shutdowns and can quickly provide you with mortgage relief, such as a forbearance, deferral, repayment plan, or loan modification.

How Do Forbearance Programs Help Prevent Mortgage Foreclosure?

The servicer might offer you a forbearance. During a shutdown, most servicers offer an initial three-month forbearance period for federal employees. During this time, you're excused from making mortgage payments. Extensions are often available as needed.

Repayment Plans, Deferrals, and Loan Modifications

If you end up missing several payments and will have trouble catching up, the servicer might offer a repayment plan, deferral, or even agree to a temporary or permanent loan modification. Repayment plans and payment deferral options typically let borrowers repay missed payments over several months or add them to the loan balance. With a modification, the servicer adjusts your loan terms to make payments more affordable. As part of the process, overdue payments are usually added to the loan balance.

Also, as part of one of these options, your loan servicer might agree to waive late fees.

When Should I Contact My Loan Servicer for Payment Help?

Once it becomes apparent that you won't be able to make your mortgage payments, contact your loan servicer immediately. Don't wait until you miss a payment, as shutdowns can be unpredictable in length. Explain your situation and ask about options. Many mortgage companies will work with their clients on a case-by-case basis.

How to Contact Your Loan Servicer

Before you contact your loan servicer, gather the following information: Your loan number, income details, a copy of your federal ID/paystub, and an explanation of your hardship. Then, call your servicer to explain your situation. Ask for the loss mitigation department. (Or it might be called the "home retention" department.) You can find their contact information on your billing statement or online.

When you talk to a representative about loss mitigation options, be sure to say that your hardship is due to the government shutdown. Ask about forbearance, repayment plan, deferral, and loan modification options, as well as a waiver of late and other fees. Once your servicer agrees to provide mortgage relief, be sure to get a written confirmation of the agreement.

Sample Script for Calling Your Servicer

Here's a sample script to use when you contact your mortgage servicer:

"My name is ______________. I'm a federal employee affected by the government shutdown and can't make my next mortgage payment. What mortgage relief or forbearance options do you have for people in my situation? Will this impact my credit, and can you provide written confirmation of the arrangement?"

Alternatively, you might be able to handle your request and the application process online. Be sure to stay in touch with your servicer, no matter what method you use to contact them.

Will Mortgage Relief Affect My Credit Score Long-Term?

Working something out before you actually miss a payment could save your credit score from suffering a hit. Forbearance, deferrals, and modifications usually don't hurt your credit if your payments are reported as current. Creditors may also use certain reporting codes to ensure shutdown-related payment relief doesn't have a negative effect on your credit.

If you've already skipped a payment, you can ask the servicer not to report the late payment to the credit reporting bureaus. In the past, some companies have agreed to delay adverse credit reporting during a government shutdown.

Be sure to review your credit reports (go to AnnualCreditReport.com to get free reports) to confirm that the servicer is reporting the arrangement as agreed. If the servicer reports your mortgage loan as delinquent, you might consider adding an explanatory statement to your credit reports.

Other Ways to Manage Debt and Avoid Foreclosure

If you aren't able to work out a payment-relief option with your loan servicer, you might want to consider alternatives. Some other strategies for managing debt and avoiding foreclosure include emergency loans, using existing credit lines, reducing or deferring other debts, strategic expense cutting, and finding other sources of income.

These approaches give homeowners more ways to protect their finances and homes, and are especially important during crisis situations like a government shutdown.

Can I Get an Emergency Loan or Furlough Assistance?

Some banks, mainly credit unions, offer short-term, low-interest emergency or furlough loans. You usually won't have to go through a credit check, and the interest rate could be as low as 0%. To find out if this type of loan is an option in your situation and to find out how much you can borrow, contact your bank or credit union. Many credit unions also waive fees and offer increased credit lines for affected members. You should, however, avoid getting a high-interest online personal loan or payday loan.

And be extremely cautious when it comes to borrowing from retirement, Thrift Savings Plans, and 401(k) accounts. Withdrawing money early or borrowing from these kinds of accounts can be risky. If you lose your job (a real risk during a prolonged shutdown), you might have to repay the full loan in a short period (often 60 days). For example, with a 401(k) loan, if you can't repay the loan or if you take a direct withdrawal (especially if you're under age 59 ½), you'll likely owe income taxes and a 10% withdrawal penalty. (Thrift Savings Plans are similar but work a bit differently.) Borrowing from your 401(k) or other retirement accounts should be a last resort due to the significant consequences and risks. It's usually better to exhaust other emergency options first.

What Expenses Can I Cut to Free Up Cash for My Mortgage?

Contact your other creditors, like your car loan lender, credit card company, and utility company, to ask if they have any options for people with temporary hardships. They might let you skip a payment or make reduced payments. You'll likely have to pay up eventually, but you might be able to get a delay.

Using Home Equity to Cover Missed Mortgage Payments

If you already have a home equity line of credit (HELOC) and you're still in the draw period, consider taking out money to make your mortgage payment. Generally, the interest rate for a HELOC is considerably better than many other options, like getting a cash advance on your credit card. Using a credit card to get a cash advance can be very costly; most banks charge a fee of up to 5% or so for taking a cash advance, there's usually no grace period, and APRs of around 25% aren't uncommon.

Reduce Your Other Expenses

Making reductions in your other expenses could affect your lifestyle, but in some instances, you might decide that the change is for the better. For the time being at least, consider canceling subscription services, like online streaming services and home maintenance services. If necessary, pay only the minimum on your credit card balances and, again, ask your creditors if they have any flexibility on payment deadlines or amounts.

Find Other Sources of Income

Some people turn to crowdfunding sites (like GoFundMe), second jobs or gig-economy jobs, or selling belongings to raise money to pay for critical expenses, like mortgage payments, when times are tough.

Avoid Mortgage Relief and Foreclosure Rescue Scams

If you're a homeowner facing mortgage payment difficulties, beware of scammers who reach out and promise big savings through a mortgage modification or by promising to stop a foreclosure for a large fee. Never pay upfront fees for "mortgage relief." These companies often don't provide any meaningful assistance and usually leave homeowners in an even worse position than before.

Be especially wary of any companies that reach out to you to offer assistance. People offering legitimate mortgage and foreclosure help won't seek you out.

Getting Help

If you need assistance applying for mortgage payment relief, consider talking to a HUD-approved housing counselor. A housing counselor can help you deal with your servicer at no cost.

If you need assistance in dealing with your other debts, consider talking to an accredited, nonprofit credit counseling agency, like one associated with the National Foundation for Credit Counseling (NFCC). Services are often free or low cost. A credit counselor can help determine the best options for meeting your current credit and debt obligations. Nonprofit credit counseling agencies can also help you develop a budget, negotiate payment arrangements, and avoid scams during a financial emergency. Again, beware of for-profit debt relief companies.

If you're facing foreclosure or want to know more about your legal rights, consider talking to a foreclosure lawyer. If you can't afford to hire a lawyer, you might be eligible for free or low-cost assistance from a local legal aid office.