This news has been a long time coming, I just got the below from USDA. It looks like GUS (Guaranteed Underwriting System, which USDA & lenders utilize to run automated underwriting on mortgage applications) will be updated in mid-September and USDA will remove the "subject to" verbiage, which should motivate all remaining lenders who have been holding out on USDA to resume making new USDA loans.
Many of you may be aware of recent legislation in which Congress provided USDA with authority to resume operating the Single Family Housing GuaranteedLoan Program (SFHGLP) at no cost to taxpayers. This was done through a combination of authority to: increase the upfront fee up to 3.5 percent of the principal obligation; charge a new annual fee of up to 0.5 percent of the outstanding principal balance; and waive payment of any fees for low and very low income borrowers up to a certain amount of loan guarantees.
Rural Development expects to complete an interim enhancement to its electronic systems by mid-September to accommodate the increase in the up-front fee to 3.5 percent. When this interim enhancement is complete, Rural Development will process all Conditional Commitments issued after May 26, 2010, that had the proviso "subject to the availability of funds." These Conditional Commitments will be processed in the date order by which they were received by the agency. Also, after the enhancements are completed, Rural Development will resume issuing standard commitments without the special "subject to" condition.
In the meantime, Rural Development will continue to accept complete loan applications and issue Conditional Commitments subject to the condition in italics below. Lenders may close loans upon receipt of these conditional commitments, but will assume all risk until the Loan Note Guarantee is issued.
We are currently doing USDA mortgages even without needing USDA to update GUS, so for those who are in need of USDA mortgages prior to the mid-September update please feel free to contact me at shane@thebesthomeloans.com or at www.thebesthomeloans.com
Shane Milne
Loan Officer
949-273-4161 direct office
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