There’s been much talk recently about USDA Loans, and how to get through the USDA Home Loan Process as quickly as possible in NC – especially as the USDA Eligible Area Maps are suppose to change on October 1st.Â Now, there’s a bigger question:Â What Happens to USDA Loans if the Government Shuts Down?Â
If your USDA Home Loan is in line to be underwritten – does a Government Shut Down change things?? Yes it does.Â Your wait in line just got longer.
It’s been more than 15 years since we had such a last minute roll call of the US Government not meeting it’s Budget obligations, that would force a Shutdown.
If this goes through the process it did with President Clinton, and Congress does not pass a budget that is acceptable to the President by the end of the day – the USDA Director doesn’t have the authority to spend any money.mÂ This means non-EMERGENCY folks will be put on furlough, and that includes Underwriters.
The Bank’s position is that if the Mortgage related employees in the Government (FHA Home Loans, USDA Home Loans and VA Home Loans) are shutdown, we will not underwrite any of those loans.Â There’s too much of a risk that the programs might come back “changed” in some fashion.Â There’s already a call to change the USDA Home Loan Maps – what if they change the USDA PMI rates, or the USDA Income Limits as part of the Budget process??Â
How could programs change?Â The longest “budget” shutdown lasted 21 days.Â During that time, the 13 separate Appropriations Bills that make up the Government Budget were all discussed.Â One of the 13 Appropriations Bills that determines the overall US Budget is the Farm Bill. Â If during the Farm Bill discussion, Congress finds a way to add more money to the bottom line by changing USDA PMI rates (for example) it will simply insert that into the Bill.
I had a question yesterday from someone at an Open House: “If the Government Agencies like USDA, FHA and VA put underwriters, and those responsible for the Mortgage Loan Process on Furlough – does that mean you sill have to make your mortgage payment?”Â Well, if you currently HAVE a FHA, USDA or VA loan, then you are probably NOT making your payments to that Government Entity, so YES you should make your payments!
In the case of a USDA Direct Home Loan – you STILL want to make your mortgage payments on time, just be sure to check back in a week or so, and confirm that they posted your payment as being on time!
Just like everybody else watching this Country battle it’s way through the Political Process – we have our fingers crossed, and our noses pressed to the screen to see if there are any changes coming our way – and hoping that some miracle happens, and things stay pretty much like they are… which means that if you are already under contract, and your loan is waiting for underwriting at the USDA Loans NC offices… you are waiting at least 3 weeks for the Underwriters at USDA Home Loans NC to review your file.
If you are NOT under contract. and you think you’re ready to buy a home that MIGHT be affected if the USDA Eligible Area Maps change – check back tomorrow, and we’ll give you an update – or call us, anytime, 919 649 5058
Have questions about a USDA Home loan NC?Â Want to know more about What Happens to USDA Loans if the Government Shuts Down? Call Steve and Eleanor Thorne 919 649 5058 – we’ve been through many Government policy changes, and we know the guidelines!Â We can help you find out if your income qualifies for the program in your county â€“ and if the property you have your heart set on is within the USDA Eligible Area Maps Footprint!