Saturday, March 13, 2010

Rural Development Guaranteed Mortgage Funds Depleted in April

USDA announced on March 10th that they expect to deplete their funding by the end of April.  This tipically happens toward the end of each fiscal year while they wait for the next years funding.  It is not a big deal in that situation because they issue "conditional commitments" subject to appropriation of funds.  The only impact is a delay of the Loan Note Guarantee.

This depletion of funds in April is a big deal and will have a major impact on the mortgage industry.  To put it simply, there are no more funds and USDA will not be issuing a "conditional commitment"!

Think about why this will have such a large impact.  This is the only true 100% mortgage on the market excluding the VA loan.  There are many excellent buyers in the market that want to purchase a home but have little savings which is a reflection of todays economy. 

There is a domino effect here.  Without this surge of qualified buyers the continuing surge of forclosures and declined sales in new construction will cause the housing market, which drives our economy, to take a nose dive fast.

What about the home buyer tax credit??  The buyer must be in a contract by April 30th and those loans must close by July 1st, 2010.  That only allows 60 days to close the loan.  I wonder how many people will lose out on this tax credit?

This is the Official Statement released by USDA SFH Loan Guarantee Division on March 10th, 2010:

Notice of Funding

This message is to notify you that program funding for the Single Family Housing Guaranteed Loan Program will likely be exhausted by the end of April, 2010.

Once funding is exhausted, the Agency will not issue Conditional Commitments “subject to receipt of appropriated funds.” This is because it is not certain when additional funding will be available.

Limited funding may become available for disaster areas declared in 2008, or in disaster areas declared for Hurricanes Katrina and Rita. Limited funding may also become available as prior Agency commitments are de-obligated, however, such funding will be very limited.
JP Morgan Chase formed a coaliton of lenders that have already met with the Under Secretary and folks on Capitol Hill.  The Under Secretary and Capitol Hill people were "surprised" that this happened.  Hey, I am SHOCKED that they were surprised!  Or maybe not, ...  it has long been my opinion based on their decisions that they don't have a clue about the mortgage industry, the banking industry, or the needs of the American people.

I have heard that some temporary funding may come by the reprogramming of some ARRA funds or from funding that was allocated to the USDA Direct Home Loan Program which is intended for people with low to very low incomes.  The USDA National Office has a phone number for inquiries, (202) 720-1452, and they also recommend that you contact your Congressmen with your questions.

Please, contact your Congressmen!

97 comments:

  1. I hope that they will extend this loan. It is the only way I can buy a house right now. I really want to get a house for my new wife and baby!

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  2. USDA has another 100% loan. It is the "Direct" loan. Buyers here must have low to very low income.

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  3. The Direct loan takes a little bit longer but it is a good program.

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  4. USDA does not allow 2nd homes or investment homes. Their focus is on first time home buyers. That is: people that have not owned a home in the last 3 years.

    However, they do have an option for people buying a forclosure that do not qualify for the USDA loan. It is at a higher interest rate and there is no subsidy. Call your local office. I think investers may qualify under this option but I am not sure.

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  5. i hope they do extend this because i am currently under contract on a house with this loan and they have jerking me around for the last 3 weeks pushing off my closing date and it is getting to the point that the seller of the home is looking to sell to someone else because of the usda people dragging their feet.

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  6. Cory,

    The underwriters at USDA are over whelmed by the volume of loans. They are at least 4 to 5 weeks behind. They have Stacks and Stacks of loans to be underwriten.

    They do not have enough employees to handle the volume and they cannot hire more people.

    They are not jacking you around. They are doing the best they can under the circumstances. Regulations require them to process the loans in the order they are submitted.

    Your buyer just needs to be patient. I know it is hard but what other option does he have. You could be just days with in approval. If the lender has approved it and sent it to USDA it is like 98% done and approved.

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  7. I really hope they extend this program as my husband and I have been in the process of looking for a house to buy as a 1st time home buyer and are at a stand still hoping for this program to open back up.

    In order for us to move from where we are without having to pay someone high rent and move our children into a better school district we need this program to be extended.

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  8. It is not uncommon to run out of funds at USDA. However it will be earlier than usual because the lack of other 100% loan programs. We are confident that they will be restored.

    USDA has a Direct Loan Program as well as the Guaranteed Loan Program. The Guaranteed Loan program allows higher income and the loans are originated by other lenders. This is the one running low on funds. The Direct Loan program is originated by USDA and the income limit is lower. The Direct Loan has a surplus funds available. It is possible that some of the funds from the Direct Side can be moved to the Guaranteed Side.
    You may meet the guidelines for the Direct Loan program and you can find information on that program here: http://www.usda-rural-development-direct-mortgage.com/index.htm.

    Good Luck,

    Hope it works out.

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  9. can the quaranteed loans be subsidized with a section 8 voucher

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  10. That is not possible for the Guaranteed Program. However USDA does have a subsidized loan called the Direct program. These loans come directly from the Government, no outside lender is involved. All Tax payer money. the following site has information on the Direct Program. http://www.usda-rural-development-direct-mortgage.com

    Goog Luck

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  11. Sorry, here is a clickable link to that website. Click on the name above.

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  12. if you have a usda quarenteed loan can you refinace it to a usda direct loan

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  13. I am scheduled to close on a USDA loan for a house on Wednesday, but we are having problems with our builder (house not 100% done). If we were to ask for an extension, what are the chances of it 1) happening and 2) not losing our funds? Any help is greatly appreciated!

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  14. USDA does not do refinances. They do have - sort of a program - to refinance homeowners that are going into forclosure but I have never heard of one actually being made.

    It may change from state to state so you may want to call your nearest USDA office.

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  15. In most situations USDA does not want you to close unless the home is completed. An extention with the lender usually is not an issue. It is the seller, or the bank if it is a forclosure.

    Sorry, There really isn't enough information here to be more specific.

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  16. i have been waiting for my commitment from the USDA since apr. 17 when my file was sent. anybody in the same boat as me waiting, and any idea when this could happen. The seller is fumming but hes stuck with me or put the house back on the market, and take his chances with the house sitting for months.

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  17. from what i know the usda is not depleted here in arkansas. They told me today that they have plenty of funds for financing(loans)

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  18. Because of the RUSH on the USDA Guaranteed program it is not unusual for the commitment to take 3 to 4 weeks. USDA is totally overwhelmed with the volume. Unfortunately they can not hire more people. ??? The USDA Underwriters are probably more frustrated than you are. Call your congressman. There is no excuse for not having enough people to handle the work load.

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  19. It is my understanding that they will run out of funds next week. Every office is working over to get as many loans obligated between now and then. It's like first come fist serve and the loans must be obligated in the order they come in. It is complicated.

    Also, H.R. 5017 has passed the house and now only needs approval by the Senate. This Bill will provide 30 Billion dollars funding to the program. This is more than they can spend between now and the end of the fiscal year.

    My gut opinion is that this will happen before they run out of funds. This program is a mayor boost to the housing market. Obama cannot allow the housing market to take another dive. Forclosures are still rising. This is not rocket science.

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  20. If this does pass, will it be in time for us to get the tax credit?

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  21. From USDA May 11, 2010:
    The Single family Housing Guarantee Loan Program (SFHGLF) will issue Conditional Commitments once currently appropriated funds for FY 2010 are exhausted. Conditional Commitments will be issued "subject to the availability of funds and congressional authority to charge a 3.5 percent guarantee fee for purchase and a 2.25 percent guarantee fee for refinance homes."

    Then there is a memo to Approved Lenders dated May 11, that basically says they are authorizing the issuance of Conditional Commitments once the funds are depleted which they state to happen May 12.

    Just thought everyone would want to know. It sure took a load off my mind!

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  22. Yes, what you have said is true. We just have to cross our fingers that it does pass the house.

    I don't think USDA would have come out with this information if it wasn't going to be passed.

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  23. allison the worriedMay 19, 2010 at 12:01 PM

    OH MY GOODNESS!!!! We were supposed to close today on our house. Our sellers had a RD loan and we are now unable to close with no real idea of if or when this will happen. We are getting all sorts of different info from realtors banks, etc. We dont know whether to walk away from our sellars and loose out on our new house we are waiting to purchase or try to stick this out. Is there def gonna be more funds allocated and when when when?

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  24. We signed contract April 21, 2010 and our papers have already went to the underwritters and now rural development has it but we are hoping they will sign off on the loan, my question is has the senate or who ever signed for more funds yet and will we still get our $8000 tax refund.

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  25. I can not tell you if Rural development has approved your loan but I can tell you that the bill is in the very last stage. Funds are expected in the next week.

    Your loan must be restructured by the lender because the new funding fee is now 3.5%. (previously it was 2%)

    Call your lender to make sure they are rewriting the loan. After that it is a first come first serve by date of submission.

    The big time issue is that USDA does not have enough employees to handle the volume. That is the time issue.

    Make sure your lender is on top of it.

    Good Luck

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  26. The funds are expected in the next week. If you are a buyer, make sure your lender is re-structuring your loan as the new funding fee is 3.5% now.

    If you are a seller, I know it is tough but the funds are coming. You really don't have many options. It the ball is still in play hang in there. You may not get another offer for quite a while.

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  27. Funds should be available in the next week. Loans will have to be restructured for the new 3.5% funding fee. Make sure your lender is on top of it.

    There will be a flood to USDA and they don't have enough employees to handle the volume.

    Just chill, if it is a good loan it will get funded.

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  28. Yes, there is a lot of tention about the deadline for the Tax Credit. The bottleneck will be USDA.

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  29. I understand that Rural Development decided not to issue new commitments with a 3.5% fee since HR 5007 was approved by only the House and not by the Senate. Two different bills (S3266) and HR 4899) are now pending in the Senate that would provide additional Rural Development funding but these bills are slightly different than the House version.

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  30. Terry THE NERVOUS WREAKMay 20, 2010 at 7:41 PM

    We too were suppose to close last week and it is making me crazy!We were told today that the funding was due in within days...Praying IN Indy

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  31. Yes, the bills are slightly different. However, USDA did issue a letter to their approved lenders on May 11th, 2010 stating that they would now issue "Conditional Commitments" subject to availabilty of funds and the congressional authotity to charge a 3.5% guaranteed funding fee for purchase loans and 2.25% for a refinance mortgage.

    Prior to this, they would not issue a conditional commitment. I guess you just have to read between the lines.

    If you call any USDA office they can only tell you that they are out of funds but will issue commitments. They have no idea when the funds will be available.

    If you are a lender you need to be restructuring your loans. When the damn breaks USDA will be limited by the lack of personel to handle the volume. You need to be in the front of the line.

    I have heard it is only a matter of a week or two at the most. But no one knows for sure.

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  32. I will research this more to provide more facts based on the progress of the bills. That is easier said than done.

    I'll get back to you.

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  33. USDA Rescinded the May 11th Letter to all Approved Lenders. They are NOT issuing conditional committments. They are also not sure what the new funding fee will be.

    Anonymous above is correct. I guess we will all have to just sit tight. Good Grief!

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  34. Terry The Nervous WreckMay 21, 2010 at 5:21 PM

    Please post any news about the USDA funding. Also anyone out there who is in the same holding place as we are and you get a call from your lender or realtor , don't forget get about us ! Let me know and I will do the same. Please email me treath55@aol.com. Right now I need a stress counselor!Praying In Indy

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  35. HR 4899 is the FY 2010 Emergency Supplemental appropriations (Disaster Relief and Summer Jobs) which is scheduled to be up for debate in the Senate when they reconvene on 5/24/2010. Details on this bill can be found at http://thomas.loc.gov -- with any luck, the Senate will approve some version of this bill with additional USDA funding by 5/28, after which they are in recess until 6/7. The House will have to vote on this legislation too. They will also be in recess after this week until 6/7.

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  36. We went under contract on April. 24 with an RD Direct loan, everything has gone very smooth inspections repairs and now we are just awaiting the appraisal. Does anyone know how long the underwriting process takes after the appraisal? Or what exactly the underwriting process is? I'm just concerned because it is May. 22 and we need to close by June 30th for the tax credit. Any info?

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  37. USDA Direct Loans are a horse of a different color! I dont think there are any words to describe the difference.

    The major time issue is lack of USDA Personel. The same person that underwrites your loan is the person that goes out into the field to do the inspections.

    You couple that with the high volume of applications and you can see why it takes 3 to 5 months from begining to end.

    Every office is different. Some have more employees than others. You need to contact the office that is handeling your loan and just ask them what the time frame is.

    Good Luck

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  38. Hello,
    After reading all of this info I must say as frustrated and sad that I am, it makes me feel a little better that I am not alone in my situation. We were supposed to close on our home (first time home buyers) on April 26. The seller was unable to move in time because she is going through a divorce so our closing date has been pushed back multiple times. Needless to say, we were supposed to close TODAY!!!! We are currently in a holding process as well as everything has been done with our loan, appraisals, inspections, etc and we are only waiting on the USDA. I really hope things work out. Now we are forced to be out of our apartment by the 1st and we don't even know if we will get to close by then with the current hold up situation by USDA. Please keep me posted Kale's Group. You are a tremendous help!!!!!

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  39. seems to me the bill we need passed is S. 3266, which has already passed in the house as HR 5017, and is in sub-committee with 14 senators as cosponsors( that's more than 13% of the senate as sponsors. text and tracking can be found here .http://thomas.loc.gov/cgi-bin/query/D?c111:1:./temp/~c111uflR7m::

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  40. U.S. Senate Committee on Banking, Housing, and Urban Affairs
    534 Dirksen Senate Office Building
    Washington, D.C. 20510
    P: (202) 224-7391.
    Call About S3266

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  41. has anyone heard if the bill has passed yet for rural development to recieve there money so we can all close on our homes.

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  42. No one has heard yet. We are all holding our breath. They were suppose to look at it yesterday. This is outragious!

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  43. Anonymous,

    The pain and disruption in your life is unbelievable. I sincerely believe that the funding will come but no one knows when. I am hoping by 06/07/10.

    But that is just the beginning of the nightmare! USDA does not have enough employees to get the loans funded by the 6/30/10 deadline for the Tax Credit.

    They are just as frustrated as you are!!

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  44. So if Senate votes on it Friday and it passes it has to go back to the House and they will be out on holiday until 6/7/10 I believe. The House has to approve as well? This is all so frustrating. My story is as bad as everyone elses. I was suppose to close 5/20/10. My kids and I are on pins and needles praying things go smoothly (nothing has so far) I have to be out of my rental 7/15. Of course I'd like to close by July 1st so I can still get the tax credit but now I'm more worried about being homeless!

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  45. I was suppose to close my house on the 24th and my mortgage place called and said that they ran out of funds and they are waiting for congress to pass the bill letting them have more funds..does anyone know when this will be?

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  46. Maybe funds will be there by the 31st. No one really knows.

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  47. The Senate may be close to passing their version of the legislation found in HR 4899. Look for news from USDA permitting $2.5 billion in additional commitments to lenders 'subject to funding and approval by Congress to charge a higher 3.5% guarantee fee' making the program self sufficient. Lenders will need to re-disclose closing costs with higher fees and re-underwrite loans for USDA to issue commitments. Lenders may choose to close loans at their own risk knowing that the fee could change and the guarantee from USDA will not be issued until Congress actually authorizes this additional authority OR wait to close until they know that USDA will back up their commitment with an actual guarantee authorized by Congress.

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  48. 05-26-2010 05:30 PM

    Per an email from the USDA today:



    This is to authorize the issuance of Conditional Commitments for the Single Family Guaranteed Loan Program (SFHGLP) after currently appropriated funds are exhausted. Conditional Commitments will be issued subject to:

    A. The availability of funds and statutory authority to obligate such funds to support the proposed guarantee;
    B. The statutory authority to charge a sufficient guarantee fee, if any is needed, to support the proposed guarantee with available funding; and
    C. Should the lender pass on to the borrower a loan origination fee that is higher than the guarantee fee that RHS is ultimately authorized to charge on the proposed guaranteed loan, the lender agrees to promptly return the difference to the borrower.

    Rural Development will continue to accept complete loan applications and issue Conditional Commitments from approved lenders subject to A, B, and C above, up to $2.5 Billion in total loan guarantees. Lenders may continue to process guaranteed loan requests, receive Agency Conditional Commitments, and close loans during this timeframe.

    The following steps will apply:

    1) Rural Development will not reserve loan funds for applications in process during this timeframe.

    2) Rural Development will continue to accept complete Section 502 Guaranteed loan program applications from approved lenders and issue Conditional Commitments for those applications that are eligible.

    3) Lenders may close these loans as scheduled.

    4) Rural Development will "obligate" funds for loans processed subject to A, B, and C above.

    5) Once the funds are obligated, Rural Development will process lenders' Loan Note Guarantee requests when the loans are verified as being closed and all conditions of the Conditional Commitments have been satisfied.

    6) The lender will assume all loss default risk for the loan until funds are available for Rural Development to obligate, and the Loan Note Guarantee is subsequently issued.

    7) Subject to numbers A, B, and C above, when the lender requests the Loan Note Guarantee, the lender must certify to the Agency, using the process provided in RD Form 1980-18, "Conditional Commitment for Single Family Housing Loan Guarantee," that there have been no adverse changes in the borrower's financial condition since the date the Conditional Commitment was issued by the Agency.

    Please contact your State SFHGLP coordinator to determine the guarantee fee that will be charged.

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  49. anyone have any idea when they will have the funds?

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  50. anyone hear how the senate vote went today?

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  51. To my understanding the bill was passed for more fundings. My question is will loans that were already ready to close be closed by the end of june for those who qualify for the tax credit?

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  52. The senate passed a bill for more funds now we have to wait for the House to pass it, anyone know how long that takes or is it just a matter of time..like days?

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  53. Does anyone know if the bill has passed for sure

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  54. I don't have any official word but I do know that USDA is providing Conditional Commitments again. Conditional on the passing of the bill.

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  55. Since usda has the emergency funding approved, how long will it take usda to inform the lenders that have files waiting to go over to usda for final approval what and if there are any new guidlines? Since the approval for the emergency funding i am waiting to hear back from my loan officer and they are waiting to hear back from there processor to see if the processor has to make any changes. Please advise

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  56. it was passed in the house it doesn't go back it goes to a group from sen and house and they hash out the differences and it goes to the prez, they are still on vacation till the 7th.

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  57. I don't know if depends on the state , we are in Indiana but I know we have to had the best Loan Officer there is, She submitted our files to USDA on May 27 and we closed June 3rd.Not nervous any more.My Heart goes out to those who are still in limbo, I know how you are feeling.I was feeling the pain till we actually closed and got the keys on June 3rd. Thank you Lord!!!

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  58. I am getting very nervous about this, Im going on vacation this Saturday and wont be back until June 20th, When will this be done with so we can sign, im hoping it happens in the next week here because i dont know what im going to do when i go out of state! I wanna get the first time tax credit, anyone hear anything yet!?

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  59. anyone know when this is going to be! I go on vacation Sat till June 20th! I wanna be able to get the tax credit! Please update! Thanks!

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  60. Does anyone know when this is going to pass so we can get the funds!?

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  61. any more updates...to know when the funds will be out so we can close on our house???!!

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  62. any more updates on when this is going to be over!?!

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  63. I think it passed and the new Funding Fee is 3.5%. GUS has not been updated yet so contact your local office to see how they are handeling it. Each state may have slightly a different way of dealing with it.

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  64. We are planning to purchase a home on September or October with the Guaranteed Program. This has been our plan all along and it should still be fine, right? Our only other option would be FHA and we would have to start saving up for a down payment immediately if the Guaranteed Program funding won't be available. Also, the new funding fee of 3.5% that used to be 2%... Is that the fee that they charge instead of monthly PMI?

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  65. Yes, and the 3.5% funding fee can be financed into the loan. It is a good deal.

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  66. I was curious as to what a ballpark range for a rate should be on USDA loan for a person with a 700+ credit score. I understand the rate is going to be higher than a conventional loan but I'm not thrilled with the rate I've been quoted. Just wondering what's a fair range.

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  67. The rate is set by the lender you use but USDA does set some limits. I have not heard that the rate is higher than a conventional loan.

    Lenders base their rates on risk factors. The only way for you to find an answer to your question is to shop around and make sure you have all the answers about what your risk factors are.

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  68. It has not passed yet #!$#%^ .

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  69. PLEASE HELP!!! Does anybody know when tennessee {chattanooga area} will have money? I have had my papers in since the first of april.
    Myself and my brother did them the same day,and he's already closed,and thay told the guy who ownes the house i'm buying thay ran out of money. I have tried to call her to find out if thay have money yet but i'll I get is the secatery and she don't know. I was already aproved. Feel like I'm bing jerked around.

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  70. You are not being Jerked around. You should ask your lender if they ever submitted your loan to USDA and if they have a conditional commitment? Some states are re-pooling funds, ... what ever that means.

    If your lender has a conditional commitment they have the "option" to close the loan now. The details are a little complicated but you have a right for your lender to explain to you what is going on. Insist on it. Every state is different.

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  71. My daughter signed a contract on her house on April 15th. She was told it would take about a month. They have changed her closing date two times and now they still don't know when it will close because of the pending vote. Is there any legal thing she can do to ensure her of getting the $8000.00 tax credit? This seems so unfair!

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  72. I checked the latest copy of HR4899 and the only money for the dept. of Ag. loans was for farmers. There have been numerous versions, and at least 126 amendments to the bill. It doesn't look too promising that more money is coming down the pipeline any time soon. Maybe I read it all wrong. . . . .

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  73. Looked into the bill--HR4899. No money is listed in the latest version as coming to the home loan sector of the Dept. of Ag. Money for farmers, and to a food program. That was it in the latest version.

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  74. I am a Real Estate Broker in Tennessee with a client who has been in contract since the beginning of April. The home she selected has required several repairs to pass appraisal etc. and as soon as we were ready to submit for Conditional committment the funds ran out. I have called my Congressmens office, have the most experienced lender for these loans in the area and still do not know the status of this funding. This is the first place I have seen the name of the bill so that is major progess.

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  75. They thought it would pass before the July 4th break and then it would take 3 to 4 weeks to update the GUS software for the new funding fee. I don't think they finished/passed it today.

    This is just poor management. USDA has twice as much funding in the Direct program than they could possibly use. (technically the Direct program is a subprime loan) They could have just transferred some of those funds to the Guaranteed program. At this point I wouldn't be surprised if the bill never passes and we have to wait till October for more funding.

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  76. The USDA funding was part of the Supplemental Appropriations Act of 2010 which was blocked last week. Originally the bill was set to pass with overwhelming support since almost everything the bill funded was either cost offset or paid for itself. However, before passage the Dems attached the unemployment extension to the Act. That part was not cost offset and would have added another 30 billion to the national debt. This attachment is what is causing the stalling and deadlock on the Supplemental Appropriations Act.

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  77. It really doesn't matter when it passes as long as you have a lender that will utilize the conditional commitment to close and fund USDA loans right now like I am

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  78. You guys who are still waiting on the GUS to update, don't. Find a lender who will manually underwrite your loan. It takes longer, the guidelines are more strict, but... You can actually get your loan approval, loam committment, and close on your loan before the GUS system will ever be updated. That's what my husband and I did. We have been under contract since April. The bank gave us a deadline to close since they were holding two mortgages on our house. We finally close on Wednesday and will have the keys in my hand by Thursday!
    The loan guarantee fee went from 2% to 3.5%, and our payment stayed the same as what was quoted at 2%, but opur FICO scores were way over 780, so it helped.
    Good Luck to all of you and stop waiting. Do a manually underwrite on your loan and close before Sept 1st. You still have time!

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  79. Well, My husband and I closed on our house Thursday morning and by Friday at 5 Pm we had the keys. We are now moving into our house. We went with a Manual underwrite on our USDA Guarantee loan. It took along time, but it was worth the wait. The GUS has not been updated yet as far as I know. The manual underwrite took 19 days from start to finish. Our interest rate is at 5.0% fixed for 30 years.
    You still have time guys!!! Hurry up.

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  80. I'm closing and funding USDA Mortgages using the conditional commitment. 30 year fixed rates from 4.625% to 4.75%!

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  81. anyone have news on this? it's sept. and I am being told there is still no money for tennessee? someone please email me if you have legit information.

    emmadapoet@yahoo.com

    thanks again

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  82. Our latest blog post in August gives an update on this. Be sure to read the very bottom as it explains all the smoke and mirrors.

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  83. Does anyone have any idea when new funds will be available for 2011?

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  84. We are still waiting to close on our house we've been under contract for about 2 months the apprasail didnt go through and after the sllers lowered the price, USDA said we had to wait cuz there werent any funds available nemore. can someone tell us what going on , what we could do? We have to move out of our appt by the end of this year and we are freaking outt, any help/advice would be appreciated.

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  85. i wanna know when is the fund coming because i apply this program since last year of November.

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  86. when is the fund coming? What if your qualified this program then after that they had to check your credit history?what if your credit is bad do you still qualified for this program?

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  87. We were pre approved back in March for a USDA loan. We are building a new house and went until contract with the builder. The house in near completion and we have updated all information with the lender and they entered the loan through GUS and we received an "ACCEPT" the lender underwriter has finished and now the loan has been sent to RD. The lender said RD has emailed them asking for copy of complete tax returns, they only had the first 2 pages of our 2009 & 2010 returns. I have sent the returns again with all schedules. Anyway I am just worried why RD would be asking for these. The lender just said they were questioning our tax returns and had a question about our income. But the lender has ordered return transcripts from IRS and they have all W2S. I am just worried because there is so many things that could go wrong and we have been building this house for the last 4 months. Our real estate agent is going for closing date of July 29th. Think we have anything to worry about at this point?

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  88. Don't have your file but what you have disclosed is normal. Rd is only going to Guarantee your loan. When RD underwrites the Lender's documents they may ask for more documentation. This is no big deal as long as your lender has done their home work.

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  89. I heard back from the lender and now they are saying because of the unreimbursed business expenses on our 2009 & 2010 tax returns they have to count that as debt which now puts our debt ratio way out of qualifying for a USDA mortgage. I explained that my husband will no longer have these expenses as of this year and they asked for a letter from his employer stating this. I have the letter send it to them and they said USDA will allow credit for meals for 2009 & 2010 which still will not help our ratios. Now they are getting a VOE from his employer for this year because he is earning about $12,000 more this year than last year if you span out over the year. I am sitting on pins and needles wondering how they end up doing the average for the last 2 years and factoring in his current income. I am just hoping if they factor in current income will come out ok on our ratios then. When they did the pre approval in March they had our tax transcripts and failed to figure in these unreimbursed business expenses so now we are completely caught off guard and house suppose to be ready to close on July 29th. Please wish us luck that all goes well and we get to move into this new house we have been building.

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  90. My husband and I have a RD direct loan. We have been under contract since July and still waiting for funding. We can never get a straight answer if and when the funding is coming. Now with our closing date only 3 weeks away we don't know what to do. Our apt lease is up same day as closing. and we have no where to go with two small children. I have already called congressman and written. My realtor and I have called numerous people from Rural development. I just don't know what to do.

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  91. Unfortunately there is nothing anyone can do. The direct program goes thru this every year. Congress has not allocated/approved the 2012 budget. However, they will probably issue a continuing resolution effective 10/1 that allocates 80% of the 2011 budget for the first quarter. That cannot happen until at least 10/1 and there is no guarantee that it will happen then. The only thing you can do is get an extention on your contract and do a month to month on your rental. Good Luck.

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  92. Jessica_ I really hope they get funding because I have really been looking forward to having my house build....the only thing we can do is keep praying

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  93. Has anyone heard about funding for the Direct loans for 2012 yet? Builder will be done with the house at the end of October and I am hoping there won't be a glitch with the funding.

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  94. If you have a 502 DIRECT construction Loan the funds should have already been obligated prior to the contractor starting construction. There should not be an issue if you followed USDA RD Guidelines.

    However, if he agreed to construct prior to funding you may have a problem. A FY 2012 budget has not been approved and may not be for several months. They did pass a CR that allocates 80% of the FY 2011 budget for the first quarter. However, most have already used that budget. Best thing you can do is call the office that is doing your loan. Every State operates a little differently.

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  95. We signed a contract to sell our home on Sept 29,2011. The realtor told us to be out of the house by Oct. 31, 2 We did get out, rented storage and live in our motor home for the time being on a campground. The campground fee is not cheap either. $420 plus electric.We sat there all month and heard nothing. We called the realtor and requested an update. The couple buying from us use the guaranteed USDa home loan program. We were told by the realtor it would take an extra 2 week for closing over a conventional loan which is usually 30 days to closing. Well,it is now Dec4, 2011 and nothing yet. I called the lending company and was told that the couple was well approved by their underwriters and the file was sent toUSDA for a commitment letter. We have heard about the USDA running out of funds. We have no clue what is next.We also understand that the lending loan may expire after 60 days? We will have to check on that with the LO. Also, I think, we need to extend the signed contracts.It seems the realtors do not have a lot of info to pass on to the the sellers and that can be frustrating.We have to find everything out ourselves. Anyone with a similar situation? Answers are appreciated.

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  96. The 2012 Budget has been approved. There will be plenty of funding. I think it is around 24 billion. It may be another week until the funds are allocated and available for obligation. You will need to extend the contract date if it has expired. That is not a big deal. Good Luck.

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