USDA Rural Housing – Out of Funds

On April 15, 2010, in Uncategorized, by David Monsour

The Gettysburg PA Real Estate market and the surrounding area typically qualifies for the USDA Rural Housing loan.  It’s tremendously popular because it doesn’t require a down payment, there is no monthly mortgage insurance premium, and the seller can pay up to 6% of the sale price for the buyers closing costs.  For those reasons, it’s taken the top spot as the loan of choice for those that qualify. 

Now that I’ve discussed all the benefits of the loan I have some bad news.  Due to the popularity of the loan the funds for the 2010 fiscal year have dried up way earlier than the USDA or the US government expected.  The USDA ficsal year runs from the first of October to the end of September.  Last year they ran out of funds at the end of their fiscal year only to be refunded 2 weeks later.  This year the USDA is out of funds in April and won’t be refunded until October.  There have been some grumblings from within HUD that the USDA will be refunded, but certainly nothing we can hang out hat on. 

So what does this mean for the consumer?  Well you’re out of luck.  The following was released by national office in Washington, DC.

“This message is to notify you that program funding for the Single Family Housing Guaranteed Loan Program will likely be exhausted by the end of April, 2010.

Once funding is exhausted, the Agency will not issue Conditional Commitments “subject to receipt of appropriated funds.”  This is because it is not certain when additional funding will be available. 

Limited funding may become available for disaster areas declared in 2008, or in disaster areas declared for Hurricanes Katrina and Rita.  Limited funding may also become available as prior Agency commitments are de-obligated, however, such funding will be very limited. 

We apologize for any inconvenience this may cause you.  Should you have any questions, you may contact the Single Family Housing Guaranteed Loan Division at (202)720-1452.”

If you’re considering this loan you’re going to have to do one of two things.  Either bite the bullet and apply for an FHA loan (still a great loan) or wait until the USDA gets refunded in October.

 

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