Today, the US Department of Agriculture (USDA) made an announcement regarding the availability of funding for the USDA Section 502 Guaranteed Rural Housing (GRH) program.
USDA Rural Development has announced that funding for the USDA GRH Program will likely be exhausted by the end of April 2010. In order to provide assistance to your organization during this time, we have addressed the following key areas:
Loans Approved by USDA Rural Development
Once a loan is approved by USDA Rural Development and a Conditional Commitment for Single Family Housing Loan Guarantee (RD Form 1980-18) is issued, the loan will not be impacted by the lack of funding, provided the loan closes before the expiration of the 1980-18. (As a reminder, Lenders may request a 90-day extension of the 1980-18 from USDA Rural Development.) This projected lack of funding will only impact loans in process that have not received a USDA Rural Development approval (RD Form 1980-18.)
Closing Your Loan
Lenders are reminded not to close their loan with loan amounts or interest rates that exceed the loan amount or interest rate on RD Form 1980-18. During this projected time of funding shortfall, it may be very difficult to obtain a loan amount or interest rate change from USDA Rural Development after loan closing. As a result, the Lender may not be able to obtain the final USDA Loan Note Guarantee (RD Form 1980-17) unless the loan is closed under the terms of USDA Rural Development's approval (RD Form 1980-18).
Unless you already have a USDA loan submitted to a USDA office for approval, funding for additional loans will most likely be unavailable. There has been indication of when additional USDA funding will be made available.
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