I have been hearing a lot of stories recently about borrowers being unable to close their USDA loans due to lack of funding, or because they are waiting for new funds for USDA loans, or because their lender can’t close because the program is out of money.
Apparently this problem stems from the “investor” side of the lending business, or who the ultimate holder of the loan will be. Some lenders sell to investors that will not accept USDA loans on a “conditional” basis, meaning if the USDA loan program is in between funding from Congress, then these investors will not purchase the loans. The lender has no choice but to wait it out because they can’t sell the loan after they close it.
While I can’t speak for the lending community as a whole, we do deal with investors that will buy USDA loans on a conditional basis, so we have not had any delays, nor have we held up closings due to a lack of funds. If you are presently being told you can’t close your loan due to lack of funding, you might want to check with another lender to see if they have the same limitation.
If you are in California, feel free to contact me and I will see if I can assist you.
Baxter Scruggs is a mortgage banker specializing in USDA loans in California, NMLS #156370. He can be reached at email@example.com, 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