Great
News! USDA Rural Economic Development has money to lend and they are working around the clock to get loan underwritten! Unlike other programs, USDA must ALSO underwrite all mortgage loans prior to funding. Since they were out of money for @3 weeks – they are behind.
So that’s the GOOD NEWS… Here’s part of the bad news:
The Funding Fee is now 3.5%. That’s up from @2% with funds that ran out in May, 2010. So if you purchase a $100,000 your loan will now be $103,500.
Here’s the OTHER Bad News:
Most Brokers will not be able to close these loans. We close on a warehouse line, so I’m good to go – but with law changes earlier this year… Brokers must meet a 5% High Cost rule. In that rule, a Broker can not make more than 5% on a loan. Origiantion Fee, credits we give to a borrower, attorney fees, title insurance, funding fees, application fees, underwriting fees and several other things go into the calculation. This will make it literally impossible for BROKERS to do these deals… I personally think it is sad that Consumers just lost so many options.
Again, we are making these loans, and will be glad to help you with purchasing and qualifying for a USDA home loan! Call us! Steve and Eleanor Thorne, Mortgage Banker in Cary 919-649-5058 Remember, if you are considering a NEW HOME – the builder has to let you use the mortgage company of your choice… and offer the SAME incentives!
Hope to get some going soon.
Lenders are not being shy about offering the most aggressive rates of the year as they need to get as much new business in the door and locked now just in case mortgage rates move higher in the days to come. The only loans I recommend floating are those that can be locked on a shorter commitment period in the next few months.