Shutdown could be felt locally

WORTHINGTON -- As the federal government shutdown continues, housing issues in the area could begin to face problems. According to Randy Thompson, executive director of the Worthington Housing and Redevelopment Authority, funding would cease if t...

WORTHINGTON - As the federal government shutdown continues, housing issues in the area could begin to face problems.

According to Randy Thompson, executive director of the Worthington Housing and Redevelopment Authority, funding would cease if the shutdown doesn’t end soon.

“We receive the funding on the first day of every month,” Thompson said. “If we don’t get that on the first, then I do not have any funds to direct those payments out. We have about 190 families in the program in a seven-county area in southwest Minnesota. This is not just Nobles County we serve for this program.”

Through the U.S. Department of Housing and Urban Development (HUD), those families receive what’s called a Housing Choice Voucher.

“By having a voucher, these families are able to go out and work with a private landlord and find a place to live,” Thompson said. “We then assist them by making a portion of their rent payment to their landlord. The amount of that portion of the payment is based on the tenants’ income level and that sort of thing.”


Some of the tenants are single-person renters. However, many are families.

“There might be a few of them who are single individuals that qualify, but a good share of these are households with children under the age of 18,” Thompson said. “It’s affecting families.”

According to Thompson, there are 125 landlords who would be affected in the area - covering Nobles, Murray, Lyon, Lincoln, Redwood, Jackson and Cottonwood counties.

Thompson said he hasn’t contacted the landlords yet.

“We made the decision we are going to wait until Monday, Oct. 21,” he said. “If the shutdown is still not settled at that point, we are going to be issuing a written notice to all our landlords letting them know there is a potential if the government shutdown is not stopped or solved by the first of November, they would not be receiving their Nov. 1 rent checks.”

At that point, Thompson said it would be up to the landlords on how to proceed.

“I don’t know what they are going to do because my hands are tied,” he said. “I have no reserves in those accounts. We do rely on the check each month from the federal government, and it’s basically an in-out bank account. It’s not like I’m sitting with a big reserve in those accounts that I could float this fund out of reserves for a couple months while we wait for the government to get back in business.

“Believe me, I want to send you a check,” Thompson continued. “These people have qualified for the program; we want to assist them with the rent. But if I don’t have the money, I don’t have a way to send you a check.”


Without the government up and running, some landlords may be dealing with their tenants in a different manner.

“How much time will they allow before they could say, ‘Sorry tenant, I’m not getting the payment from the federal government by the way of HUD. Either you have to pay me, or I have to start an eviction process for non-payment of rent,’” Thompson said.

Even though the shutdown took effect on Oct. 1, the monthly payments for this month have been deposited.

“I checked our bank account right away in the morning of Oct. 1 because there was some uncertainty,” Thompson said. “HUD had told us they were pretty much assured the money would be there on the morning of Oct. 1, and it was. We did receive our funding.”

Some home loans to be affected

According to Mark Vis, First State Bank Southwest Real Estate Loan Officer, home loans are also being affected by the shutdown.

“The first-time homebuyer loan program, that is a loan where we get the guarantee from Rural Development,” he said. “Rural Development is shut down with the government effective Oct. 1. Basically, they guarantee the loan for us, the lender. That allows us to close it. Without the guarantee, we can’t close the loan. It could possibly delay some funding on some of the closings on some of our loans.”

Other programs could also feel the impact.


“If someone wants to refinance or buy a house with some down payment, that’s called a conventional loan,” Vis said. “Different programs require different things, but our program requires us to get tax transcripts from the IRS. With the IRS being shut down, we can close, but we take the liability on our bank if we do that.”

Vis said he hasn’t seen anyone be affected by this yet, but if the shutdown continues, it will start to have an impact.

“It hasn’t caused any delays yet for us, but it will starting the end of the next week and later in October and November - it just depends on how long the shutdown goes for,” he said. “If they would make an agreement tomorrow, it might not delay these closings at all. But if the shutdown takes another week, two or three weeks, then it’s going to start to cause some issues.”

Vis said it’s causing undue stress on the home-buying process.

“Buying a house is supposed to be an enjoyable time for everybody,” he said. “The seller is probably going to move on and buy something else in town or out of town, and it has far-reaching effects as this continues to happen. Hopefully it doesn’t take too much longer before they sort things out at the government level.”  

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