USDA gets funding for 2011

From the National Office in Washington D.C.

November 3, 2011 Funding Now Available!

Funding for the Single Family Housing Guaranteed Loan Program is now available for fiscal year 2011, under the Continuing Resolution. 

Purchase type loans will be subject to a 3.5% upfront guarantee fee.

Refinance type loans will be subject to a 1% upfront guarantee fee.

For the last 6 months some lenders weren’t offering USDA loans, and some were closing the loans on a conditonal baiss, pending the new fiscal year.  As of November 3rd, the USDA program is fully funded again.

Baxter Scruggs is a mortgage banker specializing in USDA loans in California, NMLS #156370. He can be reached at bscruggs@guildmortgage.net, or at 760-497-7705, or toll-free at 877-347-0004, ext. 226. Licensed by the California Department of Business Oversight under the California Residential Mortgage Lending Act.  The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. Terms and conditions apply, all loans subject to underwriter approval. Subject to change without notice. Guild Mortgage Company NMLS #3274

Advertisements
This entry was posted in Uncategorized. Bookmark the permalink.

42 Responses to USDA gets funding for 2011

  1. Megan Nelson says:

    We are selling our house to someone getting a USDA loan. The appraisal and inspection have been done and we are ready to close except that their realtor keeps telling us that they are waiting on funding. Does this sound right?

  2. usdahomeloan says:

    Meagan,

    You might be confusing “waiting on funding” the loan, with funding availability from the USDA. When a loan is all set to close, documents have been signed, and money is in escrow, usually the last step is “funding” the loan, and waiting on funding just means the lender needs to wire the money.

    For USDA availability on an on going basis, the program needs “funding approval” from Congress for the program to exist. Last year they exceeded their funding limit and some lenders stopped offering the program, while others closed loans with the expcectations that additional funding would be approved.

    Presently the USDA program should be fully funded and all lenders offering USDA loans should be able to close them. You might want to confirm with your agent that the lender funding the loan is fine with USDA, and they are just waiting for the normal last minute paperwork needed for all loans to close.

    • Guest says:

      Does that mean that the USDA direct home loan is funded now for the rest of this year? Do you know if it will be funded for 2012? Im in Alabama. Im not sure if that matters..

    • Guest says:

      Hi, I was wondering will the funding run out for the direct loan at the end of this year? If so do you know if its likely it will be refunded in 2012? I just sent in my application to see if i’m qualified for a loan. How long does this typically take? I know if i do qualify it suppose to take about 30days to find out the loan amount i’m qualified for. Is that correct? Im sitting on pins and needles sooo excited and also very worried. I just hope its funded when all the paper works done so i can start looking for a home. I sent the pre application in on last Monday…

      • B. Scruggs says:

        The government fiscal year ends September 30th. We just received an e-mail yesterday that the USDA guaranteed loan program would be suspended starting October 1st until new funding is approved. Obvously with all of the budget debates going on right now, it is getting caught up with the overall debate and debt ceiling.

        This happened last year but we were still able to close USDA loans on a “conditional” basis. We will not be able to this time so after Friday the 3oth, it will be wait and see unti new funding is approved.

      • Tiffany says:

        B. Scruggs – does that mean that if we’re already preapproved for a guaranteed USDA loan that we will not be able to close escrow now?

      • usdahomeloan says:

        The key is if you have the USDA commitment by September 30th. When a lender approves a loan, the last thing the do is send it to USDA for the final approval. Everything must be in, including the appraisal and final approval from the lender. If your loan is still in process, or hasn’t gone to USDA yet, then that would mean they haven’t issued the commitment yet, and if that is the case, you would be held up in the budget / funding issue. Check with your lender on whether they had the commitment.

  3. I have customer that has been approved since early this year (applied in December 2010), but USDA said that they don’ t have funding….Reading this article…they do have funding…What is the deal….I have seller/buyer waiting on funding on approved loan and have Loan approval letter from Local USDA saying it is approved, but waiting on funding……Would be nice to clearify.
    thanks,

    • usdahomeloan says:

      Bob,

      I honestly don’t know what the hangup would be. We can presently process and close USDA loans. Even last year when USDA was over their funding limit, we were closing loans on a “conditional committment.” It may be different if you are dealing directly with USDA versus an approved lender. I can’t speak for what might or might not hold them up.

  4. ANA L. says:

    I’M IN SOUTH TEXAS. I’VE BEEN WAITING FOR “FUNDS” SINCE DECEMBER. IT’S NOW APRIL AND LOCAL USDA OFFICE KEEPS SAYING THEY DON’T HAVE FUNDS TO CLOSE AND 60+ PEOPLE WAITING FOR MONEY TO CLOSE ON THEIR LOANS. APPRAISALS ETC ARE ALL IN. JUST NEED MONEY! I WAS HOPING FOR SOME RESOLUTION/INFORMATION ON THE CONGRESS VOTE APRIL 8TH, BUT STILL DON’T KNOW WHAT’S GOING ON. PLEASE HELP! I ACTUALLY APPLIED WITH USDA IN JULY 2010. I DON’T KNOW IF IT’S “NORMAL” FOR THE PROCESS TO BE THIS LONG. =(

    • usdahomeloan says:

      Ana,

      I have seen this happen alot over the last 12 months. Horror stories of how long it is taking to close USDA loans, lenders waiting for funding, extended escrows, etc. Apparently it depends on the investors that the specific lenders are selling the loans to. There are some investors that will not buy loans on a “conditional” basis, meaning if the USDA is in between funding, they will not purchase loans until the new funding has been approved. The investors we sell to will buy loans on a conditional basis, so we have not missed a step in closing loans. I wish I could help you out with your specific situation, but I only lend in California. 😦 . You might want to check around to a few other USDA lenders to see if you can find one that is currently closing USDA loans. I know we are. Feel free to let me know what you find out. I would be interested to know. Good luck!

      Baxter Scruggs

      • ANA L. says:

        Who do I check around with to see if they are closing USDA loans? I went straight to USDA office. I submitted app and all documentation to them. So the USDA office finds these investors for all buyers first, and then we close? I thought it was directly funded and the loan was with the government. I’ve found info online that as of April 15 2011, Obama signed a final continung resolution and the FY 2011 budget shows 24,000 in millions.

  5. usdahomeloan says:

    Ana,

    I don’t know if things are different when your deal directly with the USDA and if thing are different if you are under the USDA Direct program or the Guarantee program that approved lenders use. For the guarantee program, approved lenders underwrite USDA loans and close them to USDA guidelines and they genterally sell them to a handfull of lenders (investors) that service the loans. That is the way the mortgage industry works in general on most loan programs. So when I say “investors” I am talking about the behind the scene lenders that ultimately service the loans (own the loans and collect payments). For example, you may close your loan with ABC bank, but after it closes you may get a letter from Chase Home Loan saying they will be collecting the payments. They are the “investor” on this deal.

    I can’t speak to your specific issues on being held up on funding if you are working directly with the USDA, but there are no dealys on our end closing USDA loans. I am closing one later this week, so funding is not an issue.

  6. Tosha says:

    I also got approved for a USDA loan in Texas and I am being told that the funds are not available, this has been since Nov 2010 then i was told they gave me to many extension an had to re apply,so i re applied and was approval again so i have been placed on hold since April 2011. I’m very thankful that the guy im getting the land from is being patient and hasn’t giving up yet. I have had blue prints drawn up, contractor is ready,and the apprasial has been done on the property. So at this point what is the hold up an who could I contact to get more info…

    • usdahomeloan says:

      Tosha,

      I dont know if you are working on a construction loan directly through USDA, but on the guarantee program done directly through lenders for existing properties, there should be no delays in closing loans. We have been closing them here in California in 30 days.

    • Ana says:

      Tosha, same thing happened to me. I applied since June 2010. I had blue prints done, appraisal was done, but no funds available. I was tired of waiting since appraisal was done in January.. I called DC and I was told it probably would be September when there is funding again. =/ There is no hold up on Direct Loans, that is correct. It is our type of loan that does not have funds.

  7. Guest says:

    How is the funding for the usda direct loan in Alabama now? Does anyone know? I am in the process of applying for this loan and i hope and pray its funded and not going to drag out for months..

    • usdahomeloan says:

      I am not as up to date on the direct program since I mainly deal with the guarantee program. Whatever you are hearing directly from USDA is going to be the most accurate information.

  8. Ann says:

    I just got a reply back from my local office saying that there is Funding!!! Im soo happy right now! I just hope i can get approved and into a home before it runs out. Thanks for the info above.

  9. Ann says:

    Does anyone know if you can get approved for a home that (had) an in ground pool? It is no longer a pool but just a hole in the ground. No different than a dried up small pond.. But the realtor is still advertising it as a pool… Also can anyone tell me how long it typically takes to be approved for the loan if you send in the application threw the mail? I have been told 30 days. Is that 30 week days or 30 stright days? Thanks!

    • usdahomeloan says:

      Ann,

      I know in general USDA’s policy on in ground pools is the appraiser can’t give value to the pool in the appraisal. If it is just a hole in the ground, depending on how deep it is, you might run into a health and safety issue and the hole may need to be filled. I dont know the turn times at USDA but if they say 30 days that usually means calednar days.

  10. Guest says:

    Do you know if that includs the direct loan as well?

  11. BSB says:

    We accepted an offer on our house from a family with a USDA loan. The commitment date was for Oct. 30. Should I be concerned that this might not occur due to funding?

    • usdahomeloan says:

      it appears that lenders can close on what are known as “conditional commitments” while the budget process is being worked out. not all lenders will do this so check with your buyers lender and plan accordingly.

  12. Guest says:

    We finished our eligibility forms and sent them back to the USDA. We were approved to fill out the forms for the direct loan. We have the papers and will try to have them filled out and sent in by Monday. Can any one tell me how long it will take to find out what amount we are approved for? Also is this the last step? Thanks so much to any helpful answers.

  13. Guest says:

    Is there ever delays with the direct 502 loan? When the funding runs out for the guranteed loan does it not run out for the direct loan? Please help.. thanks…

  14. Ann says:

    What are the standards the home must meet to be approved for the USDA 502 loan? I know that is must be in a rural area. No in ground pools. And in good repair. But I’m wondering how good of repair must it be in? If there are minor things that need work like it needs new carpet or the kitchen cabinets need to be replaced. Does that type of thing matter? Also if a homes in foreclosure would it be eligible? Thanks for any info.

    • usdahomeloan says:

      Ann,

      Usually a home must meet health and safety requirements and be in liveable condition. Carpet, deferred maintenance, paint, etc. are a judgement call from the appraiser. The house doesnt have to be perfect, but bare paint, worn out carpet, missing appliances will always need to be addressed.

      Baxter

  15. nat says:

    i have been approved with usda loan.but i cant found the house for the price of loan ,my question is can i add the money above the loan limit (i can borrow from my boss) and buy house? any recomendation , please

    • usdahomeloan says:

      Nat,

      you can put money down but technically it cant be “borrowed” money. you can get a gift, although that is usually from a family member. you may be able to establsih enough of a relationship with your boss and that might be acceptable to a lender. Dont know if that helps or not.

  16. nat says:

    THANKS.AND ONE MORE QUESTION…CAN I BUY A HOUSE, IF IT WAS SINGLE FAMILY HOME BUT NOW property is set up as a two units , BUT EASE TO GET BACK ,HOW IT WAS BEFORE?

  17. Ann says:

    Does that mean that the guaranteed loan rate is 3.5% and the direct loan is a 1% rate? Thanks.

    • usdahomeloan says:

      Ann,

      the current guarantee rate for the guarantee program is 2% up front (ususally financed into the loan) and then a monthly fee of .3% (.3% is the annual fee, divide by 12 for the monthly fee). I am not sure about the fee on the direct loan. This is for the “guarantee fee.” If you are referring about the actual interest rate, that is not related to the guarantee fee but is rather dictated by current market rates.

  18. nat says:

    no. the 3.5% for both loans, but with direct loan you pay just 1 %, and 2,5% pay USDA ,if you have low income, if your income will change you will pay up to 3,5%

  19. Dave says:

    We are about to close on a short sale. Is there any money for a USDA loan right now? We have been waiting on the bank for some time, we were supposed to close 2 months ago, but the bank has dragged its feet. So if we close now or close to the begining of December is there money in the USDA budget? I cant find any current info.

    • usdahomeloan says:

      Dave,

      I get this question all of the time. While I cant speak for other lenders, nor for the direct program through USDA, on USDA loans we are currently processing under the guarantee program, we can close them and we are closing them. We can close them on what are called “conditional commitments,” even though USDA has not gotten funding yet for this fiscal year. You need to check with your lender if they can do the same, or find another local lender that can close them on conditional commitments.

  20. I app;lied for a guaranteed loan, didnt know I had to find a lender, (where in my townn, my bank claimed they didnt do usda loan, found out thats a lie).Wouldnt let me get the loan, and have banked with them for 12 yrs, Now Im wondering is this discrimination.( but I do know it is the reason) whats the purpose of a usda loan if you gotta go out and find a lender for yourself. still havent found a lender cause i dont know which one deals with usda loans.

    • usdahomeloan says:

      Ms. Duke,

      You should be able to find a usda lender in your area. Just try to google approved USDA lenders or ask your real estate agent for a possible recommendation. Not all lenders do USDA loans, but any participating lender in your state can help you out.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s