USDA Rural Development loans are back!

Reblogger Greg Miller
Mortgage and Lending with Ruoff Home Mortgage 234777

Gerry Suarez, posted this article yesterday. Great news for buyers using USDA Loans

Original content by Gerry Suarez Jr. 310298

The USDA issued a memo yesterday, May 26, 2010, reauthorizing the issuance of conditional commitments for USDA loans. What that means is that your better lenders (the ones that usually close USDA loans while funds are waiting to be allocated) will immediately be able to continue closing loans. The amount that has been authorized is $2.5 billion and it's expected that new funding will be available from Congress before this is exhausted (there are currently a few bills, but HR 4899 is the most likely to pass quickly- possibly by today).

Do know this money comes at a cost. Per the memo, lenders are asked to call their state USDA coordinators to determine the amount of the guarantee fee that will be charged. This fee was 2% and it is generally accepted that it will increase to 3.5%. This means any loans, regardless of when the application was taken, that receive their commitment to fund from these new dollars will have the higher fee. I've spoken to a number of lenders and so far all are treating it as a legitimate "change of circumstance" that requires redisclosure of the good faith estimate and the truth in lending disclosures.

Also be aware there is a backlog of files that were not underwritten by USDA, This will likely result in delayed turn times from your USDA offices in the short term. Locally my office in Central Florida (Ocala for me- not Davenport!) is quoted 7-10 business day turn time.

Thankfully the increase in the guarantee fee will make the USDA Guaranteed Rural Development loan self funding- much like FHA. That means no more October delays and a much smoother future for the program, which remains the one of the last 100% financing programs in the country (VA is the only other one).

Gerry Suarez, Jr.

Your FHA Loan Pro!

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainer
293,571
Melissa Anderson
Mortgage of Texas & Financial - San Antonio, TX

Loan Officers, this is great news! 

DON'T FORGET TO RE-DISCLOSE THE HIGHER FEE..... or your gonna pay it.............

May 29, 2010 12:36 PM #1
Rainmaker
171,122
Greg Miller
Ruoff Home Mortgage - Sarasota, FL
Florida Home Loans - Conventional,FHA,USDA,VA

It is great news Melissa, However the change in fee would be a legitimate change in circumstance that you could pass on with re-disclosure.

May 30, 2010 06:04 AM #2
Rainer
293,571
Melissa Anderson
Mortgage of Texas & Financial - San Antonio, TX

Yes the higher fee is a legitimate change of circumstance, but just think how many inexperienced Lo's are going to forget to re-disclose?

It is great news, I'm very happy about it.

May 30, 2010 11:11 AM #3
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
171,122

Greg Miller

Florida Home Loans - Conventional,FHA,USDA,VA
Ask me a question
*
*
*
*
Spam prevention

Additional Information