Recently USDA announced concerns regarding the availability of funds for fiscal year 2010 and that funding will likely be exhausted by the end of April 2010. According to Chase Rural Housing Services, the remaining funds for purchase transactions for the USDA Guaranteed Rural Housing Program, effective March 15, 2010 are 3.9 Billion dollars.
Rest assured, once a loan has been approved by USDA, the loan will not be affected by the lack of funds. When USDA approves a loan they issue what is termed a Conditional Commitment (RD Form 1980-18). The Conditional Commitments are issued for a period of 90 days, so only those loans which have not received commitments issued by USDA could be affected by the funding issue if funds are exhausted.
Many agents and buyers have expressed concerns regarding the funding issues surrounding the USDA Rural Housing program. However, very few have actually inquired as to what they can do to assist in making sure that funding continues for the program. We encourage everyone to contact their members of congress regarding the funding issues surrounding the USDA Rural Housing program and express the potential counteractive effect the shortage can have on our battered housing industry.
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