US House of Rep. Approves Rural Housing Preservation and Stabilization Act of 2010- HR 5017

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Mortgage and Lending with Waterstone Mortgage Corporation

Yesterday, the U.S. House of Representatives passed the Rural Housing Preservation and Stabilization Act of 2010 (H.R. 5017).  Through this legislation, the guarantee fee in the USDA Guaranteed Rural Housing (GRH) Program may be raised to offset any need for Congressional appropriations.  Additionally, H.R. 5017 would authorize USDA Rural Development to guarantee up to $30 billion in loans in Fiscal Year 2010.  This would represent an additional $18 billion in loan making authority for the remainder of this fiscal year.

Before these changes can be implemented, similar legislative action will need to occur in the U.S. Senate.

Following this action in the House, the USDA Rural Development National Office sent an announcement that stated: "Depending upon Congressional activity with the proposed legislation it is possible that the Agency may consider issuing Conditional Commitments."

*CHASE Lender Update 4-28-2010

My interpretation is the USDA is bumping the guarantee fee to 3.5% to make the program self sustainable. This fee will be financable much like the current 2.04% fee is.

Also note that they have added an additional 18 Billion in fees to bridge the program through 2010 while the old program is restructured with the new fees.

 

 

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