May 10
24

USDA Loan Rural Development Update

37 Comments

USDA Loan Rural Development Update

The USDA Loan has been on hold with the Rural Development offices across the country as they “ran out” of funds for USDA Loans.  There are several bills on the table that would eliminate the funding problems for USDA Loans and one is being reviewed in the Senate right now.

The most immediate need for home buyers who need a USDA Loan is to get the funding going right now.  H.R. 4899 is the Disaster Relief and Summer Jobs Act of 2010 which the Senate is discussing today at 3:00.  If it passes it will provide $102.7 million to the USDA Loan program. That doesn’t sound like a lot, does it?

The way the USDA Loan guarantee works is that the buyer currently pays a 2% USDA Loan guarantee fee and the remaining 1.5% is subsidized by the USDA.  The replenishing of funds replenishes the subsidy, so $102.7 million could help provide USDA Loan guarantees throughout the end of 2010.

The other bill on the table is H.R. 5017 the Rural Housing Preservation and Stabilization Act of 2010 which would put the full 3.5% guarantee onto the home buyer and also introduce a monthly mortgage insurance payment for USDA Loans which would make it look more like an FHA loan product.

Apply for a USDA Loan Online Now: Loan Application

Once we hear more on the Senate discussion, we will post them here.  If it passes today, we could see lenders begin to fund USDA Loans right away.

To apply for a Guaranteed USDA Rural Home Loan click on the Get Started tab above or click here.  You can also ask a question about Guaranteed USDA Rural Home Loan on Get Started tab.

I’d love to hear your comments on this new way of funding USDA Rural Home Loans below.

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Posted in USDA Funds by pauldunn 37 Comments

37 Responses to "USDA Loan Rural Development Update"

  • Jen says:
    May 27, 2010 at 3:33 pm

    Any updates yet??

  • pauldunn says:
    June 4, 2010 at 7:08 am

    Jen – HR 4899 has passed and SOME USDA lenders (like us) are making USDA loans again.

  • carolain says:
    June 5, 2010 at 1:52 pm

    I heard they stopped it again when will it get passed again?

  • Lindsey says:
    June 5, 2010 at 8:15 pm

    I am one of those who are waiting in limbo for the funds to be replenished. Thankfully the seller of my potential new home extended the contract to June 30th, but did so reluctantly. I don’t think I will get a second chance. Any word on actually being able to close this by June 30th? I have had the contract for this home since April 9th. The seller is getting very impatient.

  • pauldunn says:
    June 8, 2010 at 8:09 am

    Carolain – they did not stop again. Some lenders are not set up to work with Conditional Commitments and those are the lenders not making USDA Loans.

  • pauldunn says:
    June 8, 2010 at 8:13 am

    Lindsey – Many buyers are in the same situation as you, just waiting for the system to be updated. Right now, most of the problems are technical in nature in that the Government Underwriting System is set up for a 2% guarantee fee, not the new 3.5% guarantee fee. Certain USDA Loan files can be submitted and approved if they meet the basic guidelines, but if they require any sort of a waiver then the Underwriter must submit a full underwriting package to the local RD office for approval instead of the GUS Streamlined Package. This is causing some delays also.

  • James Murphy says:
    June 10, 2010 at 3:24 pm

    Any lenders in Delaware that are currently lending USDA loans?
    Can someone send the attach link from USDA that states funds are now available?
    Please email me
    Thanks in advance

  • Michelle says:
    July 13, 2010 at 3:01 pm

    Is there any word yet as to when funds will be availlable. I’ve been waiting over a month in Texas and my realtor is beginning to pressure us into going with a conventional loan that will require me to come up with $8000 in two weeks. If I could come up with that kind of money in such a small amount of time I wouldn’t need a USDA Loan. I really need this house. Is there a projected date yet?

  • pauldunn says:
    July 13, 2010 at 3:27 pm

    Michelle – Being able to fund your USDA Loan right now depends on who you put your USDA application in with. Many of the larger banks are NOT funding these. If you applied through a local mortgage broker you would have the ability to fund now. We are funding USDA Loans in Arizona right now, but I do not operate in Texas. If you need a contact for a lender currently funding in Texas, let me know and I will email you a couple names. If the bank you applied through is not currently funding USDA loans, chances are the will not until after the fiscal year which I believe is November.

  • Tim says:
    July 14, 2010 at 7:22 am

    Paul – Can you provide me some names/numbers that are funding USDA loans in Woodland Park, CO or Colorado Springs, CO? I’m having a house built and we’re scheduled to close by the end of September. The lender i’m currently with is not funding USDA loans right now.

  • pauldunn says:
    July 30, 2010 at 2:09 pm

    Tim – I emailed you a really great contact in Colorado.

    Dan – See this post about the differences between the USDA Guaranteed Loan and the USDA Direct. http://usdaruralhomeloans.com/2009/12/guaranteed-usda-rural-home-loan-or-the-usda-direct-which-is-which/

  • Anthony Morita says:
    August 18, 2010 at 10:53 am

    Hi Paul,

    Do you know of any lenders in Hawaii which are currently funding USDA loans?
    Let me know at your convenience.

    Thanks,

    Anthony Morita

  • pauldunn says:
    August 23, 2010 at 10:31 am

    Hey Anthony – I do not have any contacts on the Islands. I’ll check with some colleagues and let you know if I find anyone there.

  • Sara says:
    August 25, 2010 at 12:34 pm

    I was just told today that there was no USDA funding for the guaranteed loan program in Texas. Do you happen to know when the funding will be available. Or where I can see any updates on this.

  • jessica says:
    August 27, 2010 at 6:54 pm

    What are the requirements for Conditional Commitments. I am currently with a lender that keeps telling me they are going to fund, but my COE date is Oct. 15 and I am getting a little impatient. I need a house and I need it by Oct. 15 and it doesn’t sound like they will fund in time. I am willing to switch lenders if I have to!

  • Kim says:
    August 28, 2010 at 9:35 am

    Our buyer is waiting on funds for his RD loan. Are you saying that he probably won’t get the funds until November 1st after the Sept 30th fiscal year? We have been under contract with our buyer since July 17th.

  • pauldunn says:
    September 8, 2010 at 6:13 am

    Kim – Some banks are not funding even though RD is issuing Conditional Commitments. We are continuing to fund RD loan and have not been interrupted.

  • pauldunn says:
    September 8, 2010 at 6:15 am

    Jessica – Your lender simply has to submit the file to the local RD office to obtain a conditional commitment. Your lender may be one “holding out” in order to limit their risk.

  • pauldunn says:
    September 8, 2010 at 6:16 am

    Sara – Funding is up to your lender. If they are willing to fund off of a Conditional Commitment letter issued by RD, then you will be able to get a USDA loan.

  • Rosie says:
    November 3, 2010 at 3:27 pm

    Hi, are we getting any funds soon, I’m waiting on funds,I’m in the process of purshasing my first home here in Arizona, you have any info on that, I would appreciate if you can inform me…..or if you can e-mail me who I can get info from, here in Arizona….thanks

  • pauldunn says:
    November 4, 2010 at 6:53 am

    @ Rosie – We have not stopped funding USDA Home Loans and are continuing to fund them every day.

  • Mike Jacobson says:
    December 28, 2010 at 2:53 pm

    Is Rural development out of money for Direct 502 loans? When can we expect the goverment to fund the loan,as its at the title company just waiting?

  • pauldunn says:
    December 28, 2010 at 3:51 pm

    @ Mike – We are funding USDA Guaranteed Section 502 loans right now. It sounds like you are using the Direct instead of the Guaranteed. The USDA is not out of funds at this time, however you may need to speak with your rep at the local RD office.

  • wi says:
    January 16, 2011 at 10:57 am

    is it true I can buy and home in wisconsin and get a usda rural development loan from texas? My loan was approved from Texas for the year Jan 2011 But was told I need to wait for 60 days to close!

  • pauldunn says:
    January 17, 2011 at 11:26 am

    @Wi – Each region has their own Rural Development office which would provide the guarantee. Why would you have to wait 60 days?

  • maria says:
    January 19, 2011 at 9:42 am

    I qualified for a USDA guarantee loan (for low income) out of Uvalde, my contract is in. But, I was informed there were no funds available and the “loan officer” couldn’t give me any indication of when they would be available. I’ve heard all kinds of dates from people and some say it can take as long as 6months. Is this true?

  • pauldunn says:
    January 19, 2011 at 10:10 am

    @ Maria – The USDA has not run out of funds. If you have applied for the guaranteed loan, those are still and will continue to fund. Sounds like you need to speak with a new lender.

  • maria says:
    January 19, 2011 at 12:40 pm

    Really Paul? I’ll check up on it. Maybe it’s not a guaranteed loan, but that’s what the officer at the Uvalde Rural Development office told me. No funds and no indication of when.

  • pauldunn says:
    January 19, 2011 at 4:28 pm

    @ Marira – the USDA does all sorts of different types of loans. We only work with USDA Loans in Arizona. There is a USDA Direct loan, which sounds like what you are working on. That’s a whole different animal and it does have different rules than the Guaranteed loan.

  • LM says:
    February 4, 2011 at 5:53 pm

    I guess I don’t quite understand about the private lenders funding the USDA loans. Do the approved private lenders fund the USDA 502 loans or just the guaranteed loans? We are in limbo waiting for USDA funds so we can purchase our first home. If we could get a conventional loan we wouldn’t be so anxious but we are so afraid the house we want will be purchased by someone else while we wait. If there is a possibility we could get the USDA 502 through a private lender we would be in a much better position. Any knowledge of this in Wyoming? Thanks in advance.

  • pauldunn says:
    February 5, 2011 at 6:39 am

    @ LM – Thank you for the comment. It sounds like you are asking about the USDA Direct loan, and if that is the case you would need to talk with your local rural development office. Just google USDA Wyoming RD Office.

  • Terri J says:
    February 24, 2011 at 1:23 pm

    I have been trying for a year now to get approved for a Direct Loan… 2 weeks ago I was told that I was approved for xx amount and to start looking at houses. She said once I found a house I wanted to put an offer on to let her know, so i called this morning to tell her only to hear well I don’t know when you can close because we have no fundings and I don’t know when and if we will get funded.
    Any updates yet??

  • pauldunn says:
    February 24, 2011 at 2:33 pm

    @ Terri J – Have you thought about applying for the USDA Guaranteed Loan? There is not and will not be any foreseeable interruption in funding for the our USDA loan. We do not work with the direct loan.

  • rebecca says:
    March 7, 2011 at 12:53 pm

    What is the difference between direct or the guaranteed loan?

  • pauldunn says:
    March 9, 2011 at 8:51 am

    @ Rebecca – We only fund the Guaranteed loan. Here is a post i did a few years back on the differences http://usdaruralhomeloans.com/2009/12/guaranteed-usda-rural-home-loan-or-the-usda-direct-which-is-which/

  • Erik Brown says:
    October 2, 2011 at 8:38 am

    Hello, I have a good credit score low low debt to income divuleged any and all credit info and was told I was approved for the RD laon for a home and then,, they say because I have an instalment agreement with the IRS (not a judgement, lien) I will not be able to get an RD or FHA home loan?? Everything I’ve read- guidelines, requrments ect.. states that having installemnt agrement with the IRS and in good standing with them there should not be a problem.. But there is,, Can anybody any help me ????
    Thanks Erik

  • Anna says:
    October 12, 2011 at 4:24 pm

    Has the USDA loan passed for this year? I’m waiting on it to pass so I can finish closing on my home.

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