USDA Rural Development has issued a public notice that program funding for the Single Family Housing Guaranteed Loan Program will likely be exhausted by the end of April, 2010.
This happens every year, but Rural issues conditional commitments on the funding of the program, and Lenders have been so sure of the funding coming through that they would continue to purchase the business and wait for the guarantee to be issues once funds are secured. Essentially business went on without interruption.
This is not the case this year. When funds are exhausted, Rural will not issue any approvals until the program receives its new funding. There will not be any conditional approvals issued.
WHAT DOES THIS MEAN FOR YOU?
If your loan has received approval from Rural, funds are secured and we may continue with the transaction.
This notice will cause every potential rural loan in the state will flood into the department.
Service levels will deteriorate substantially
Expect this to exhaust the funds more rapidly than they may be expecting
Bottom line
Have an alternative plan when structuring future transactions under this program.
SOURCE.
www.rurdev.usda.gov
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