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USDA Rural Development loans are NOT out of money, and other important facts…

Reblogger
Services for Real Estate Pros

Gerry gives a timely update on USDA mortgages, the rural home loan finance alternative. Excellent program to look into and see if it is applicable.

Original content by Gerry Suarez Jr. 310298

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Last Friday the USDA formally announced it was entering its annual "roll over" of funding as of its new fiscal year October 1st. This mainly administrative action results in USDA's funding being delayed until it's made available through the General Accounting Office (GAO). This by no means indicates the USDA is out of funds! What it does do is delay funding for loans and guarantees. While there are still a number of lenders that can and do close and fund loans during this period, the vast majority of lenders do not. This doesn't mean your loan won't close, it just means you may have to wait a bit. How long? Last year the funds were made available by October 17 and this year they expect funds allocated within three weeks.

This means you may have to wait that long to close your loan, or take your loan to a lender that does fund in anticipation of the new allocation. Do note, by the time you can get an appraisal recertified, docs transferred, loan re-underwritten, etc. it's rarely worth it so you're likely best off to sit tight with your lender and wait for a late October close.

The great news is that in spite of crushing volume the USDA actually has $2 billion in funds to carryover from last year!  In Florida we went from 2084 loans to over 7000 last year. The increased volume has increased the time it takes to get approvals from the USDA so depending on your area you may need to add from 3 days to two weeks to the process. This will become very critical as we near the deadline for the Tax Credit and the desperate scramble to close by November 30, so plan in advance and plan accordingly.

Lastly for those lenders interested in learning more about the program, consider signing up for the WebEx training offered nationally. This link will take you to the registration page for more information.

Realtors and lenders, if you haven't familiarized yourselves with this incredibly successful 100% financing program you are missing the boat. Home buyers, if you haven't spoken to your lenders and Realtors about the program you may be missing out on the least expensive low down payment program available.

Gerry Suarez, Jr.

Your FHA Loan Pro!

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Provided by: 

Esko Kiuru
Mortgage, real estate and apartment industry analyst 

www.BluefoxToday.com - syndicated mortgage, housing and property management blog

eskokiuru@gmail.com
My cell: 702-499-1006

Comments (4)

Bill Ladewig
LoanOfficerSchool.com - Escondido, CA
Experience Is Your Advantage

Esko, thanks for reblogging Gerry's post.  This is good information for everyone to have.

Oct 02, 2009 12:02 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Esko, anyone applying for a loan today will most likely take at least 45 days to close, so the should not present any problem at all.  Thanks for passing on the info.

Oct 02, 2009 01:25 PM
Esko Kiuru
Bethesda, MD

Bill,

USDA is becoming a decent market player with its attractive products, so updates are good to share.

Oct 03, 2009 11:59 AM
Esko Kiuru
Bethesda, MD

George,

This was news to me, too, until I read Gerry's blog.

Oct 03, 2009 11:59 AM