USDA funding...

By
Mortgage and Lending with HomeStar Financial Corporation

DO NOT PANIC...

I've received numerous calls and emails about this very topic.  I understand there are various notices floating around from lenders essentially claiming that USDA is pulling the program.  Apparently, some of the "big boys" are pulling out of the program and as a result have decided to employ scare tactics.  I'm sure there will be more to join the bandwagon. 

Many lenders who traditionally in the past have not focused on the program are claiming that USDA is no longer accepting files.  This is untrue

On March 9th, USDA issued a statement that funding is likely to be exhausted by the end of April, 2010.  At this point the Government does not know what pool of funds the funding will come from.  However, our sources tell us that there is a strong possibility that funds could become available by the end of April.

 While funds are typically exhausted towards the end of the government's fiscal year in September, USDA runs out of funds for the program every year.

In previous years when there has been a shortage, USDA would set aside funds from other areas to make up for any shortage of funds allowing lenders the opportunity to continue to fund USDA loans.  When this occurs, USDA would issue conditional commitments stating "subject to receipt of appropriated funds". 

At the present time, USDA is uncertain where the funding will come from and IF the funds are not replenished before too long they will not honor "subject to receipt of appropriated funds" on their conditional commitments.  This means that many lenders will not be able to guarantee and or fund the loan.

The USDA loan program is a wonderful program for Rural America. The program is run very efficiently and statistically, it has the lowest default rate of ANY loan program. Politically, the administration will want to continue any positive program, especially in an election year.  Hopefully the political wheels will turn and funding will be made available soon.

We encourage you to contact your professional lobby and or politicians to request they begin working on a solution today!    

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Rainmaker
245,267
Norm Werner
Real Estate One - Milford, MI
Helping the first time and every time

Jeff's advice is worth following. So far nearly every squeaky wheel that has raised a stink in Washington has been greased with bailout money, so why should the USDA programs be any different? Call you local representative and tell them that we need this program!

Mar 16, 2010 09:17 AM #1
Rainmaker
60,528
Justin Messer
Supreme Lending USDA, FHA, and Conventional Loans - Peachtree City, GA
Residential Loan Officer, USDA Rural Housing Loan

Jeff is right.  This program is not going anywhere.  USDA always funs out of funds.  They will continue to every year and will be replenished every year.  Especially, since USDA is so popular these days.

Mar 17, 2010 04:39 AM #2
Rainmaker
300,301
Jeff Wilmoth
HomeStar Financial Corporation - Newnan, GA

Thanks guys...

Whatever folks decide to do, do not turn away prospective clients over speculation.  The government IS working on a solution to this issue.

HomeStar Financial Corporation is the top producing USDA lender throughout Georgia and has over 11 years direct lending experience with an additional 18yrs experience dealing directly with USDA prior to establishing the company.   In February 2010, HomeStar Financial Corporation was selected as one of two lenders in Georgia, to receive a visit from the Office of Inspector General (OIG) for requests on guidance with the USDA program.

Mar 17, 2010 06:09 AM #3
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Jeff Wilmoth

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