Government shutdown: Impact in South Carolina

Government shutdown may affect those buying, selling homes in SC

ccope@thestate.comOctober 2, 2013 


  • Programs continuing Below are a few of the federal offices, programs and services that, based on the S.C. governor’s office’s understanding, will continue to operate during the federal shutdown.


    The school lunch program is expected to run through October with existing funds; the SNAP (food stamps) program will continue for the immediate future; state and federal officials are determining how/if existing funds and authority can be used to continue


    Title I and Special Education payments; Pell Grants and Federal Direct Loans will be processed but likely at a slower pace.

    Health and Human Services

    Medicaid and Medicare payments, including the CHIP program (children’s insurance) will continue.


    ATF, DEA, FBI and other federal law enforcement activities will general continue, including the operation of federal prisons and the U.S. Attorney’s offices


    Employees who are responsible for processing mandatory payments - such as Social Security checks; the IRS will continue to receive and process tax payments.

    Veterans Affairs

    VA Mortgages are still available; employees who provide medical services, primarily those of the Veterans Health Administration; burial benefits and death notices.

    What is ending / shut down

    The Women, Infant and Children program services will be discontinued Oct. 15. Until then, DHEC has identified reserve funding to make services available to fill the gap.

    Columbia’s Congaree National Park and several popular historic sites favored by tourists near Charleston, including the harbor’s Fort Sumter, remained closed.

    Thousands of civilian military workers across the state are furloughed.

  • More information

    The State, The Associated Press

Even though some government housing loans are still available during the federal government shutdown, the government paperwork required for some mortgage lenders may hold up those trying to buy a home.

Government offices shuttered and many services dried up Tuesday after the budget standoff in Congress. Because of far-reaching, federal financial and consumer safety checks required in the lending industry, the mortgage business could come to a grinding halt.

If the shutdown continues, some home buyers may not be able to close on their houses.

“It could literally affect every aspect of our business,” said Ben Blanks, vice president of regional sales manager for Three Rivers Mortgage in Columbia.

The company requires a copy of a transcript of an individual’s tax returns from the Internal Revenue Service.

Without that documentation, the loan cannot be approved, which prevents interested buyers from closing on a house.

The affect would ripple through the economy, Blanks said:

•  Sellers moving their families would not be able to anymore.

•  Buyers would have to figure out where they would stay until the deal closes.

•  Real estate agents would have to wait to make money.

•  Kids moving in and out of schools would be delayed.

•  Moving companies would see bookings fall off.

“And the list goes on from there,” Blanks said.

Chaz Ellis, director of sales and marketing for Two Men and a Truck, said that between 70 percent and 80 percent of the moving company’s business is residential, including first-time home buyers, college students and people moving into assisted living.

But the company is currently booking moves, “so until the phone stops ringing and the emails stop coming in, we’re not really concerned,” Ellis said.

If the shutdown does continue, hopefully the side of the business that does commercial moves will help cover the company’s finances, he said.

Closing time

Steven Mungo, chief executive officer of Irmo-based Mungo Homes, said the shutdown will not have as much of an effect at the beginning of the month, because about 70 percent of his company’s closings take place at the end of the month.

Government-backed Department of Agriculture rural home loans are unavailable, and the agency’s website is down but offers links to government services still available, contingency plans and the text of the president’s message to government employees. However, Federal Housing Administration and Veterans Affairs mortgages are still available.

The federal shutdown also has made local accountant Stephen Kirkland’s job more taxing, so to speak.

He has to tell his clients to pay their federal income taxes, even when some of the services those taxes pay for have been suspended.

The shutdown is frustrating for Kirkland as a taxpayer and because of the amount of taxes his clients pay, he said.

“Most people do business with the federal government whether they want to or not,” Kirkland said.

Mungo said a greater impact will be if the federal government defaults on its debt. If there is a short-term spike on interest rates and if mortgage rates go up, then it will be truly bad for business, he said.

“I hope they’re smart enough not to let that happen,” he said.

Cope: 803-429-4951; Twitter: @cassielcope.

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