Available USDA Home Loan Funds now under one Billion!

photo credit: Tracy Available Available USDA Home Loan Funds now under one Billion!

Back in March the Rural Development’s national office in Washington DC released a notice projecting that the money to issue guarantees for USDA Rural Home Loans will be depleted by the end of April.

It seems like we go through the same phenomena every year…remember, USDA ran out of money in March last year. As history tends to repeat itself, there will be a lot of investors pulling the plug on loan applications for USDA mortgages. From what I hear, some major banks are no longer accepting USDA home loan applications coming in through their broker channels since March.

As of right now, we’re still taking applications for USDA home loans in Arizona, however we are closely monitoring how much is left in the kitty. With available funds (at the moment I am writing this) being less than a billion dollars I would urge any REALTOR® and home buyer to hurry and also to have a contingency plan in the event that the anticipated closing occurs after USDA is out of money.

Even though House Bill HR 5017 (a measure to correct the Section 502 Single Family Housing Guaranteed Loan Program to make it self-funding was introduced to the house) passed April 23rd, it will still need to make it through the Senate. Yes, there is a very good chance that USDA Guaranteed program funds will be extended for 2010 and beyond, however I wouldn’t roll the dice until the Senate approves it.

So don’t procrastinate, get your applications in fast if you need 100% financing, or be prepared to go with an FHA Mortgage Loan and scrape up the 3.5% down payment.