The USDA Rural Housing Program is a 100% financing, no down payment home loan program for homeowners purchasing homes in certain designated areas throughout the country with populations that are generally below 50,000 people per designated geographic area. Here in Arizona this includes areas such as Arizona City, Buckeye, Casa Grande, Queen Creek, Maricopa, Waddell and even parts of South Gilbert. It is an excellent option for buyers purchasing in these areas and has some of the lowest borrower default rates of all government backed loan programs. However, the latest announcement from the USDA is that all of the available funds for the program (which are appropriated on an annual basis) are expected to run out by the end of the April.
The message the USDA provided was the following:
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.
Now it is not uncommon for the USDA to run out of funds before the end of the year for their home loan program, but this usually occurs in September, right near the end of the Government’s Fiscal year. Therefore, there is generally not a delay in borrowers obtaining USDA home loans. However, this year will be different, because it appears that unless the USDA receives a large influx of emergency funding we may not see this home loan program available again until the end of 2010.
Of course now it will be up to the government to take action to help to fund the program or have the option of USDA home loans taken away from buyers who were planning on using this program to purchase a home.
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