Federal workers either not being paid or currently furloughed as a result of the government shutdown are estimated to owe approximately $438 million in mortgage and rent payments this month, a new study from Zillow found.

As the government shutdown enters its 18th day, an estimated 800,000 workers aren’t being paid – 380,000 furloughed and 420,000 working without pay. Despite the lack of a paycheck in the new year, these workers are still required to make their rent and mortgage payments.

“Like Americans in the private sector, many federal employees rely on each and every paycheck to cover critical expenses, including housing,” Aaron Terrazas, Zillow’s senior economist said, in a statement. “In many parts of the country, housing affordability is already stretched and a single missed payment can begin the long process toward foreclosure or eviction – which has long-term impacts on an individual’s finances and long-term economic prospects.”

The shutdown comes at a time when mortgage delinquency has hit an 18-year low, according to CoreLogic’s latest Loan Performance Insights report. Mortgages in serious delinquency – more than 90 days late on their payment – also fell to the lowest level since 2006, according to the report.

Obviously, as an estimated 800,000 workers are currently and suddenly without pay, many could struggle to make that payment this month, potentially trending that mortgage delinquency rate upward again.

Terrazas also believes if the shutdown continues to go on, there could be a significant impact on the overall housing market. Many furloughed workers are also would-be buyers who will get cold feet in the absence of a paycheck, he said.

“Buying a home is a huge leap of faith for many, as they bet on continued job security and steady income to finance their home, and consumer confidence is paramount,” Terrazas added.

It’s not simply the lack of a paycheck for some workers that could impact housing. The Federal Housing Administration (FHA) has a limited staff due to the shutdown, which could mean delays in the endorsement of some FHA loans, which many low-income buyers opt for to purchase homes.

The study also estimates that about 3,900 mortgage originations are processed each business day for loans backed by government agencies and while it’s not clear what portion of those are delayed, that means nearly 40,000 mortgages could have been impacted.

The U.S. Department of Housing and Urban Development (HUD) wasn’t expected to experience a significant impact from the shutdown. However, according to the Washington Post, a HUD rental assistance program expired on January 1 and many officials didn’t realize the program had expired. Now it cannot be renewed.

The agency was forced to send letters to 1,500 landlords Friday in an effort to prevent the eviction of thousands of tenants, the Washington Post reported. According to HUD spokesman Jerod Brown, the budget and contract staff are “scouring for money” to fund the contracts on an interim basis, the Washington Post reported.

Email Patrick Kearns

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