SHUTDOWN ENDS: GOVERNMENT RE-OPENS

Congress has passed and the President signed HR 2775, a law that reopens the government and extends the debt ceiling. USDA, HUD and other programs are funded for FY 2014, but only in a continuing resolution through January 15. The debt ceiling is extended until February 7. Both issues may be primed for further conflict by those dates. As of 9:30 am on October 17, USDA Rural Development’s web site has not reopened.

Other bills passed yesterday direct the House and Senate to convene a long-delayed budget conference committee, with a conference report due December 13, that will outline a template for appropriations for the remainder of fiscal 2014. Then an omnibus appropriations bill may follow to continue spending after January 15. Still very much in question is what will happen with the sequester cuts created in 2011. HR 2775 also provides back-pay for furloughed federal employees.

Updated October 17, 2013

THE SHUTDOWN IS OVER

The U.S. House of Representatives voted late Wednesday (Oct. 16) evening to pass the Senate bill, reopen the government and raise the debt ceiling.

SHUTDOWN TO END?

Late on Oct. 16 an end to the federal shutdown — and an extension of the debt ceiling — appears likely. The Senate is preparing a compromise bill that will reopen the government with a continuing resolution through January 15, 2014, and a debt ceiling extension through February 7. By that date further action would be needed on both fronts.

HOW HAS THE SHUTDOWN AFFECTED YOUR COMMUNITY?

HAC is interested in learning more about how the federal shutdown has impacted rural communities across the country. Please post your comments to HAC’s Facebook, Twitter or LinkedIn pages or add them to the comments already posted on the Rural Affordable Housing Group.

October 16, 2013

STORIES OF THE SHUTDOWN FROM THE FRONT LINES

As the federal government shutdown continues with no clear end in sight, HAC continues to receive accounts of the disastrous impact on rural housing. Andy Kegley, Executive Director of Helping Overcome Poverty’s Existence (HOPE) in Wytheville, Virginia, wrote to HAC about his nonprofit’s experience with delayed financing:

“Our contractor finished a home in late September, certificate of occupancy in hand, and was waiting on the local USDA RD office to walk through for a final inspection and give him a check for $42,000 (this was a 502 direct loan with RD construction financing). Needless to say, that check is still sitting on the RD desk, as the inspection didn’t happen. And now to add insult to injury, we were hoping to close today on the second loan, some $12,000 of HOME funds from the state passing through FAHE. Except we can’t because the closing agent is holding the closing funds left over from the RD closing, but isn’t authorized to release them without RD permission, and HOME won’t allow a dry closing, so my contractor is out $52,000 total, on a $125,000 contract, until the shutdown is over. The buyer told me yesterday it doesn’t feel like his home. At least he told me the first payment isn’t due to RD until 30 days after the disbursement of the funds. That could be 30 days after forever.”

SHUTDOWN UPDATES

• On October 10 the Daily Yonder published a blog post by HAC Deputy Director Joe Belden entitled “Shutdown Slams Door on USDA Mortgages.”
• Over 600 properties whose RA contracts were not renewed in September did not establish alternative payment plans with USDA and expected to receive renewals in October using FY14 funds. Because funding for USDA has not been appropriated and RD staff are furloughed, renewals are not being processed.
• The Center on Budget and Policy Priorities has estimated the shutdown’s impact on HUD’s housing programs.
• Some federal websites, including USDA’s and the Census Bureau’s, are offline, so archived information is not accessible. Others, including HUD’s, remain live but are not being updated. Several news reports note the uncertainties raised by lack of federally generated data, including one by the Daily Yonder.
• The Federal Register is publishing essential items but has announced that “documents related to normal or routine activities of Federal agencies, even if funded under prior year appropriations, will not be published.”
• On October 1, USDA RD Acting Under Secretary Doug O’Brien sent the following memo to field staff:

Due to a lapse in appropriations for Rural Development as of October 1, Rural Development has initiated the process of orderly shutdown of nonessential operations. You can view USDA’s plans for a lapse in appropriations at https://www.whitehouse.gov/omb/contingency-plans.

We understand the uncertainty that the current circumstances present for Americans that USDA serves every day, as well as our many partners around the country. Effective today, many Rural Development staff will be furloughed pending reinstatement of funding by Congress. These staff will not be available by phone or email, and cannot carry out work for the Agency, until funding is restored.

In Rural Development, this means that many services will be delayed or interrupted. For example, Rural Development will not be able to make any new loans or grants; the only exceptions will be for emergency purposes and to protect the Government’s interest. Automatic disbursements for previously obligated Rental Assistance (RA) funds will continue, but no RA contracts will be renewed or issued.

We are committed to keeping you as up to date as possible, within the limits of current circumstances.

Sincerely,
Doug O’Brien
Acting Under Secretary
USDA-Rural Development

Updated October 10, 2013

MORTGAGE CLOSINGS STALLED, ALL USDA RD FIELD STAFF ON FURLOUGH, AS SHUTDOWN ENTERS SECOND WEEK.

According to press reports, closings on USDA and other federally-backed mortgages are stalled because of the government shutdown. On Oct. 5 the Washington Post had a page-one article using as a prime example a young couple’s likely loss of their USDA-backed first-home purchase. See . https://www.washingtonpost.com/politics/shutdown-will-stall-home-loans-for-thousands/2013/10/04/47b8cb10-2c4a-11e3-97a3-ff2758228523_story.html

The Huffington Post made similar observations about the impact the shutdown could have on the U.S. housing recovery on Oct. 4 at https://www.huffingtonpost.com/doug-lebda/is-the-government-shutdow_b_4031249.html. While the article suggests that most mortgage activities will not be affected, it does note that USDA RD staff are not currently available and it is unlikely that any USDA loans will be processed during the shutdown.

USDA’s web site has only the following message for all agencies: “Due to the lapse in federal government funding, this website is not available. After funding has been restored, please allow some time for this website to become available again. For information about available government services, visit usa.gov To view U.S. Department of Agriculture Agency Contingency plans, visit: https://www.whitehouse.gov/omb/contingency-plans.” HUD’s site has more information but no entries after Sept. 30

OMB’s posted contingency plans show that 100% of the 3,336 USDA Rural Development field staff were furloughed after Oct. 1. A total of 53 RD staff in Washington, DC, and St. Louis, out of 1,394, were apparently declared “essential” and are still on the job. At HUD 337 of 8,709 employees are still working.

Updated October 7, 2013

SHUTDOWN CONTINUES

All USDA Rural Development programs remain shuttered and almost all employees on furlough as the federal government shutdown enters its fourth day. Today’s Washington Post has an article on the shutdown’s impact at the USDA finance office in St. Louis.

Updated October 4, 2013

AGENCIES OUTLINE PLANS FOR SHUTDOWN

As of Oct. 1, much of the federal government has closed due to the ongoing Congressional standoff over funding to start FY 2014. No one knows how long the closures may last. Both USDA and HUD have issued contingency plans.

USDA’s is on its website. The plan for Rural Development notes that “no new RD rural housing loans or guarantees would be issued.” RD would continue to accept loan payments, but the only Rural Housing Service staff working would be a small number at the St. Louis finance office. All other RHS and other RD national, state and area staff would be furloughed and offices would be closed.

HUD has posted a shutdown contingency plan on its site at https://portal.hud.gov/hudportal/HUD. The plan has a detailed Q and A section. All 80 HUD field offices will close. A very limited number of activities, such as homeless assistance grants, would continue if needed to protect human life and property. Drawdowns of pre-2014 funds such as CDBG and HOME will still be possible through the HUD LOCSS system, unless it is necessary for a HUD employee to approve a vouceher.

IS A GOVERNMENT SHUTDOWN COMING SOON?

Congress today and through the weekend continues to debate passage of a continuing resolution to begin FY 2014 on Oct. 1. “Non-essential” federal functions could be shut down if no agreement is reached. Both USDA and HUD have yet to issue any guidelines but are expected to soon, possibly today. HAC will provide updates at www.ruralhome.org as more information is known.

The Office of Management and Budget on Sept. 17 sent a memo to agencies telling them to plan for a shutdown (see https://www.whitehouse.gov/sites/default/files/omb/memoranda/2013/m-13-22.pdf.

Updated September 27, 2013