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Knox County Ohio Real Estate Information Archive

Sam Miller


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USDA Rural Development Out of Money

by Sam Miller

We received an e-mail today from one of our lenders confirming that the USDA Rural Development loan program is out of funds and many of the lenders have stopped taking mortgage applications for this loan program.  I cut and pasted two important paragraphs from the e-mail notification I received this morning so that you would better understand the severity and timing of this challenge:

"Current appropriated funds have been exhausted.   If we were unable to fund your loan, you will be notified in the next few days, please do not call or email us.  As many of you have been advised, the previous notice of the ability to issue conditional commitments subject to Congressional authority has been recalled.  We are waiting for further guidance on this from our National Office.  You will be notified when more information is available (we hope within the next 24 hours).  Please do not call our office or other RD offices as everyone will be notified when we have more information.

We do not know when additional funding may be available.  The House of Representatives have passed HR 5017 that would increase the guarantee fee and provide funding for the remainder of this Fiscal Year which runs until September 30, 2010.  The Senate has introduced a similar bill S 3266.  Both bills must be passed, reconciled if necessary, signed by the President and funds appropriated by our Office of Budget prior to funds being available."

From the sound of this e-mail the USDA / Rural Development loan program is no longer an option for future buyers until funds become available later in the year.  The fact that the USDA / Rural Development program has run out of funds is not new to the real estate industry but the fact that they are out of funds in the first 4 1/2 month of 2010 is a bit shocking.  I believe they are out of funds primarily because so many other loan programs have been eliminated and the USDA / RD loan program is one of the few remaining affordable loan programs.  The challenge for USDA is that they only have so much money available per their budget and the demand for low and zero down payment home loans has been extremely high especially during the First Time Homebuyer Tax Credit incentives.

If you are interested in buying a home in Knox County, Ohio but are concerned because you do not have much cash saved for your purchase be sure to contact us because we have some additional options and creative ideas that could help you.  (740) 397-7800 or

Sam Miller  

USDA Rural Development Out of Money by April 2010?

by Sam Miller

Serious homebuyers may have more than the First Time Homebuyer Tax Credit motivating them to buy a home before April 2010!  I just read an e-mail announcement from the United States Department of Agricultural announcing that it is very likely that the USDA will have exhausted all funds available for single family home loans by the end of April, 2010.  This creates additional urgency for homebuyers to get a home under contract and closed before these funds for these loans run out.

According to USDA they have stated that "Once funding is exhausted, the Agency will not issue Conditional Commitments subject to receipt of appropriate funds. This is because it is not certain when additional funding will be available."  What this means to many homeowners is that if they wait until the last minute to take advantage of the First Time Homebuyer Tax Credit and they intend to use the USDA loan program there is a VERY good chance there will not be money available to fund the loans.  The bottom line is that you could likely lose out on this super affordable loan program AND you will lose out on the opportunity to take advantage of the tax credit and the potential of getting your $8,000.

The solution is to act fast and get your new home under firm contract as quick as possible and get your loan application started.  If you wait to get a home under contract towards the end of the first time homebuyer tax credit you will likely miss out entirely.  If you would like us to get your home purchase on the fast track send us an e-mail right away or give us a call at (740) 397-7800.

Sam Miller

UPDATE on May 13th, 2010:  

We just received an e-mail from one of our lenders confirming that Rural Development / USDA has ran out of available funding.  I will update you once I hear anything new.

Displaying blog entries 1-2 of 2