USDA to run out of money?

Mortgage and Lending with Franklin American Mortgage - NMLS ID # 158383 158383

This week a memo came down from USDA stating that they were running out of money to issue conditional commitments for USDA home loans.  I talked to Pat White in the Greene County office on 3/12/10 at which time she encouraged me to get full file submissions in as soon as possible.  USDA anticipates being out of money by the end of April and will stop funding loans until they receive more government funds.  When i spoke with Pat she was afraid that the funds available would not make it to the end of April.  Unfortunately they do not have much more information then that.  i very much hope that they will have enough funds to ensure everyone who was trying to buy a house before April 30th, in order to take advantage of the first time home buyer tax credit, can complete their loan.  However it is not looking optimistic.  All i can suggest is if you are pre-approved for USDA financing you may want to do two things.  1.  start saving money for a down payment or securing a gift from a family member for 3.5% of your purchase price in case you have to go FHA and 2.  get your file in as soon as possible so that you have a chance to get USDA funds before they run out.


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Joshua Duda

Mortgage Banker
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