Every year Congress puts funds into the USDA Rural Development “Account” for them to lend out to home buyers. It’s a great program that requires no money down (for program details click here)…
On March 11, 2010 Rural Housing folks announced that they will probably run out of money before the end of April. What does that mean?
Unlike FHA, VA and Conventional loans – USDA Home Loans must be underwritten by a USDA underwriter. The Underwriter issues a Conditional Commitment. If the “account” that USDA has within the Federal Government to fund loans from runs dry… they can issue TWO different kinds of Commitments
According to Chase, the world’s LARGEST insurer of USDA Home Loans, “if the USDA issues “subject to funding commitments” we can still fund USDA loans, even if they are out of money. The USDA’s 3-11-2010 notification said that they will not issue the commitments subject to the availability of funds therefore we can’t fund the loans.”
This is significant because the Tax Credit for Home Purchases ends in April… and MUST fund by the end of June. If you are looking ofr a home, and are considering using USDA Home Loan Financing – we suggest you call us IMMEDIATELY! If you are SELLING a home – please make certain the funds are available for your transaction! Call Steve Thorne, Connect With Us on Facebook, 919-649-5058
HERE’s AN UPDATE AS OF April 6, 2010