I just received notification from the USDA that their funds are set to exhaust by the end of April. Usually, they issue a "Conditional Commitment "subject to receipt of appropriate funds". They are indicating that this year they will not be doing so as they are not certain when additional funding will be available.
So, if you are looking for a home now and planning on using a USDA Guaranteed Rural Home Loan to purchase it, you better act quickly!!
Usually funds run out in September or November and new funding is allocated quickly. The fact that they are running out in April attests to the growing popularity of this program. Congress will allocate new funds, and it might be quickly, but, do you really want to wait?
Call me if you have any questions on this.
Larry Morris is a Certified Mortgage Planning Specialist in Portland, Oregon. He specializes in USDA Guaranteed Rural Home Loans, FHA Purchase and Refinance, FHA 203k Rehab loans, FannieMae HomePath loans, Oregon VA Loans and conforming purchase and refinances in the states of Oregon, Washington and Idaho.
He can be reached at 503-421-0096.
Wow Larry, this is big news in Southern Oregon where this has become a very popular loan program in most areas. Thanks for the news.
LARRY -
This is sad to hear.
It appears the USDA has been so into making loans in small towns that it soon won't really be able to offer home loans for rural development - the stated purpose of the program.
Jared and Jim - Thanks for the comments. This happens every year, so it's more of a nuisance than anything. However, since there is so much going on in Congress right now, it's hard to say if they will just run this through real quick or hold it hostage and tie it to Health Care or Finance Reform. Obama used the USDA funding as proof that the Fed Govt was helping fund loans, even though the funds were for the most part already part of the budget.
It will be an interesting couple of months, especuially April.
I was just notified on Friday that as of April 1st, they are temporarily suspending aplications for the USDA rural home loan program due to lack of funding.
As I discovered, if you have buyers that are working on the program and sitting on the fence, contact their lender. Each handles the applications differently and some can secure funding for the loan once they are submitted to underwriting. While some (to the demise of one clients loan) must waith for a fully executed package to be submitted before funds can be secured.
Dan - We fund through several USDA landers. Chase is still honoring all locks, but not accepting any new locks. Wells and several others have shut off any new applications. I still have 1 lender who hasn't shut us down yet, but that could happen any day. Let me know if I can be os service.
Also, I haven't received notification from the USDA that they are not accepting any new applications, just individual lenders.
Thanks for the info Larry. My client that lost her loan is also due in part to the slow response from a loss mitigation department (imagine that!) So I think she is going to have to go a different route anyway.
I received the notice through one of my lenders when they received it. Perhaps it was from their underwriting department.