Government shutdown would impact some area federal jobs, mortgages, business loans
by Patrick McCreless
Sep 30, 2013 | 8206 views |  0 comments | 46 46 recommendations | email to a friend | print
Hundreds of local federal employees could be furloughed, while some area residents could lose access to certain mortgage and business loans if Congress fails to avert a government shutdown today.

As Congress failed to reach a budget deal by midnight, the White House's budget office notified federal agencies that the government will shut down today.

If the impasse continues, the lack of appropriated money will mean no work for the about 800 employees at McClellan's Center for Domestic Preparedness. It also will prohibit residents from obtaining new business loans through the Small Business Administration or home mortgage loans with the U.S. Department of Agriculture and the Federal Housing Administration. While a short-term shutdown will be more of a nuisance, a shutdown of several weeks could hurt local business and slow down home sales, some experts say.

The possible government shutdown is due to Congress' fight over the 2010 Affordable Care Act. Several of the law's key components will go into effect Jan.1. The Republicans want to defund the law while Democrats don’t. Failure to reach a deal on the issue has led to a shutdown of the entire budget process.

Shannon Arledge, spokesman for the CDP, said the McClellan facility's nearly 800 contract workers and federal employees will be furloughed starting today if the government shutdown remains in effect.

"We are allowed to come into work (today) to shut things down properly and we are allowed to do that for four hours," Arledge said.

A few essential personnel will remain on duty to meet safety and security requirements, Arledge said.

As a result of the threat of a shutdown, the CDP has already cancelled all its first-responder training through Wednesday. Arledge said if the shutdown continues for an extended period, the essential staff on duty are prepared to make the proper notifications to students. Arledge said many of the CDP students fly in for training and need notification about scheduling changes about a week in advance.

But while CDP personnel face furloughs, the nearly 3,000 federal employees at the Anniston Army Depot will still be on the job. Depot officials have said the depot is funded through 2014, meaning its employees are exempt from a government shutdown. Depot workers repair, modify and upgrade vehicles and small arms for the military.

Meanwhile, residents could be unable to obtain federal business loans starting today, according to the SBA. Robbie Medders, acting director of the Small Business Development Center at Jacksonville State University, said her organization helps its clients obtain many such loans. The center offers training and advice on how to effectively run a business, from business planning to obtaining loans.

"Our most popular loans that people use are through the SBA," Medders said. "They can be used for new ventures or by existing businesses for expansion purposes."

An extended shutdown could mean fewer new businesses in the area or less job creation due to lack of existing business expansions. However, residents who were approved for loans from the SBA before the shutdown will still receive their money, Medders said.

The FHA, which provides guaranteed mortgage loans to residents who meet certain financial criteria, will still endorse new home loans for individual families despite the shutdown because those loans are funded with multi-year appropriations, according to a report from the agency. Still, the loan processing could be delayed since fewer FHA employees will be working if the shutdown remains.

Meanwhile, FHA loans will cease for developers wanting to build multiple homes since those loans are funded on an annual basis.

The Department of Veterans Affairs, which offers mortgage loans to veterans, will continue to do so through the shutdown, according to a statement from the department. Such loans are funded via user fees and should continue.

However the USDA, which provides guaranteed mortgage loans to rural residents, will cease all new home loans, according to a department report. Also, residents who are in the loan application process will see that process slow considerably.

Anna-Marie Moorer with ERA King Real Estate in Anniston, said the local housing market can withstand a short-term government shutdown.

"If the shutdown is just for a day, it will not be a big deal," Moorer said.

Moorer noted, however, that even with a long-term shutdown, the impact to the area's housing market will not be severe.

"Of the 915 homes that have been sold this year, only 31 percent have been due to these loans," Moorer said. "So there might be a little hiccup in the market, but it won't cause anything to come to a screeching halt."

Larry Jackson, owner of Jackson Mortgage Company in Anniston, said however that a long-term drop in home sales across the country will be bad for the housing industry overall since it is still recovering from the 2008 Great Recession.

"When we're trying to get a housing recovery, this is the last thing we want," Jackson said.

Jackson added that a slowdown of mortgage loans will hurt many mortgage lenders like himself who deal with many federal loans for residents.

"My company and industry, our revenue comes from the closing of loans," Jackson said.

Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star.

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