At the Federal Housing Administration, which represents about 15 percent of the mortgage market, the lights will still be on, but the staff will be reduced.
"The Office of Single Family Housing will endorse new loans under current multi-year appropriation authority in order to support the health and stability of the U.S. mortgage market," according to a post on HUD's website. Lenders with "delegated authority" will be able to go on making FHA loans. That is about 80 percent of FHA lenders. They will also be able to get FHA case numbers through the usual on-line service. The FHA will continue to collect insurance premiums from borrowers during a shutdown as well.
"The FHA program can weather a shutdown as long as it doesn't last too long," said Guy Cecala of Inside Mortgage Finance. "But a shutdown could also seriously impact FHA's ability to police lenders and loan quality."
The shutdown, if lengthy enough, could hit home mortgage refinances as well, delaying rate locks and resulting in costly extension fees.
(Read more: 800,000 out of work as US government shuts down)
"What could happen is that our customers could be put in a hold status and then subject to interest rate gyrations that are very likely to occur between the time a government shuts down and reopens," said David Zugheri of Houston-based Envoy Mortgage.
Of course, mortgage rates could move lower if investors head to the relative safety of the bond market and drive yields down. Mortgage rates follow loosely the yield on the 10-year Treasury.
"Rates may go up this week if...Friday's job's report stays on the schedule," said Matthew Graham of Mortgage News Daily. "Markets would have to defend against the possibility of a strong report reigniting October taper expectations."