Usda Out Of Money | NC FHA Expert

USDA Gets Cash From House -Come on Senate!

GOOD NEWS! The US House Finance Committee approved a measure to fund the U.S. Department of Agriculture (USDA) Rural Housing Service Loan Guarantee Program (section 502 Loans).

Say What? Have you been reading that USDA is out of money? Well, it’s not COMPLETELY out -but it’s close. In our part of North Carolina it’s taking about 12 days to get your loan underwritten by USDA…. they sent out a message this week that they thought they would be out of cash by May 7th. This means that if your loan is not ALREADY submitted to USDA, then you would be SOL (So out of Luck).

So the fact that this program will likely get more money is GREAT NEWS! What will be even better, is if Congress can pass this bill by the end of next week – assuming it looks like it will pass, then USDA could continue issuing “Conditional Commitments.”

If, If, IF they continue issuing “Conditional Commitments” after next week – we will be able to continuing funding – even if Congress takes another 2 or 3 weeks to get it all passed.

The HIC-UP comes when there’s uncertainty about weather Congress would change the program. The version passed by the House Finance Committee does NOT change the current program. To view the Bill, click here - H.R. 5017, “Rural Housing Preservation and Stabilization Act of 2010,” – Rep. Paul Kanjorksi (D-PA)

We will keep monitoring this. If you have questions about USDA Home Loan financing, and you are purchasing in NC – please call Steve and Eleanor Thorne, Corporate Investors Mortgage Group, Inc. 919-649-5058

What Does It Mean When USDA Runs Out Of Money?

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, Corporate Investors Mortgage Group, 919-649-5058

HERE’s AN UPDATE AS OF April 6, 2010