The USDA issued this statement today regarding funds for their residential mortgage program...
"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." It's not like Rural Housing hasn't run out of money in the past. However, in the past they would issue "conditional commitments" meaning that the lender could still fund the loan and when Rural Housing got funding again they would "guarantee" the loan. What this means is that somebody who is going through the process of getting a Rural Housing loan could show up to their closing and receive the news that the lender will not go through with the transaction because the Rural Housing department has exhausted their "guarantee" money. Rural Housing is an excellent loan. You can't get much better than 100% financing with no monthly mortgage insurance. If you are in the process of getting a Rural Housing loan to purchase a home and you are scheduled to close towards the end of April, I would highly recommend that you have a back-up plan. An FHA loan, although not the better option, may prove to be an excellent alternative should Rural Housing run out of funds. The Rural Housing loan has become a much more popular loan in Cache Valley, Utah over the last couple of years as conventional 100% financing programs have gone away. Hopefully the department will get more funding soon but if not than FHA could become an even bigger player in the real estate market. If you are looking to purchase a home in Logan, Utah or surrounding areas, give me a call at 435-755-2177 and I would be happy to go over your mortgage options with you. For more information you can also visit my website at www.loganutahmortgages.com or www.mortgageloganutah.com
Comments(2)