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Committee moves USDA funding on to Congress
April 27th, 2010 | 
Author: As I reported last month, USDA said they would be out of funding for the Rural Guaranteed Home Loan Program, probably in April. Monday, the House Financial Services Committed voted unanimously to send the Rural Housing Preservation and Stabilization Act of 2010 to the full House for vote. This could mean that no money down rural loans will be available for the areas outside of Eugene/Springfield with no break in the home purchase program.
The USDA program is nearly the only 100% loan to value (no money down) purchase programs in existence today. It is only available for properties outside of the urban growth boundaries of the major cities in Oregon, such as Eugene/Springfield and is income limited. However, it is an excellent product for purchasing a home in Creswell, Cottage Grove, Veneta, Junction City or Florence. All of these cities qualify for the program and a family of four of fewer can make up to $73,600 per year and qualify.
Check out this map of the Lane County area, the lighter area is available for USDA financing. The darker area is not.
According to MND News Wire, passage of this bill will make the program self-funding and should take the yearly problem of running out of funds off of the table. “Under the new legislation, lenders up to a 4 percent premium for the guarantee at the time the loan is initiated which will enable the financing of the program…” according to MND News Wire. The current guarantee fee is 2% of the loan amount. The guarantee fee is financed.
“This program is a vital source of mortgages for rural communities, especially in this real estate market.” According to Jodie Smith, Jodie Smith Real Estate, “The loss of this program would have been very hard on the rural communities. Having the no down payment option will make the sale of rural community properties a lot easier.” said Smith.
If you have questions about an USDA Rural Guaranteed Home Loan, please contact me, your Eugene Loan Guy. I would be happy to help you in your loan needs. Even if we can’t get you qualified today, I will spend the time with you getting things straightened out so you can qualify in the future. I am a Senior Mortgage Advisor with Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401. You can reach me at 541-342-7576/541-221-3455 cell or by e-mail.
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When will this be voted on in Congress since the USDA is now out of money?
Right now, there is no vote scheduled.
I am currently having problems in Tennessee because they are out of funds. I was told that I was approved for a home loan. I made an offer of $68,500 on a 4br brick house on a corner lot one block from the school I hope to teach at. Seller accepted the offer and agreed to pay closing costs. When I went to complete the rest of the paperwork for the loan I was told there was no funds avaliable but I could try for a THDA/FHA loan. This would be good except the debt ratio has to be 45% or less and mine is 46.4%. I can’t show that my student loans are deferred for 12 months because they are currently in their grace period and I will return to school in August and they will be deferred for 2 years but this will happen after the closing date. I can’t defer something that isn’t in repayment and the company is willing to send me proof of loans being in grace period but 6 months isn’t good enough. My only other option to reduce my debt ratio is to pay off my auto loan that is $2450. If I had that much I wouldn’t have had to get the sellers to pay the closing costs. Everywhere I turn there is no help…so close to owning a home but still just out of reach. My landlord is selling where I live now that I told her I am purchasing a home and the renters in the house I am trying to purchase have been told they must be out by June 30th. Need help. Any suggestions would be greatly appreciated. I am running out of options.
The only suggestion I can offer is to either look at paying something off or see if the seller will wait until USDA has funds again. To that end, write, call and e-mail you Congress critters to get the lead out.