USDA Rural Development Out of Money
We received an e-mail today from one of our lenders confirming that the USDA Rural Development loan program is out of funds and many of the lenders have stopped taking mortgage applications for this loan program. I cut and pasted two important paragraphs from the e-mail notification I received this morning so that you would better understand the severity and timing of this challenge:
"Current appropriated funds have been exhausted. If we were unable to fund your loan, you will be notified in the next few days, please do not call or email us. As many of you have been advised, the previous notice of the ability to issue conditional commitments subject to Congressional authority has been recalled. We are waiting for further guidance on this from our National Office. You will be notified when more information is available (we hope within the next 24 hours). Please do not call our office or other RD offices as everyone will be notified when we have more information.
We do not know when additional funding may be available. The House of Representatives have passed HR 5017 that would increase the guarantee fee and provide funding for the remainder of this Fiscal Year which runs until September 30, 2010. The Senate has introduced a similar bill S 3266. Both bills must be passed, reconciled if necessary, signed by the President and funds appropriated by our Office of Budget prior to funds being available."
From the sound of this e-mail the USDA / Rural Development loan program is no longer an option for future buyers until funds become available later in the year. The fact that the USDA / Rural Development program has run out of funds is not new to the real estate industry but the fact that they are out of funds in the first 4 1/2 month of 2010 is a bit shocking. I believe they are out of funds primarily because so many other loan programs have been eliminated and the USDA / RD loan program is one of the few remaining affordable loan programs. The challenge for USDA is that they only have so much money available per their budget and the demand for low and zero down payment home loans has been extremely high especially during the First Time Homebuyer Tax Credit incentives.
If you are interested in buying a home in Knox County, Ohio but are concerned because you do not have much cash saved for your purchase be sure to contact us because we have some additional options and creative ideas that could help you. (740) 397-7800 or samsells@sammiller.com
Sam Miller
