If you are depending on a zero down payment option through the USDA Guarantee Loan program, time is running out for you to secure the property that you plan to buy with, and the department is uncertain when funds will be made available to re-establish available money to make the program available in the very near future. The memo I received by SFH Origination News From the National Office in Washington DC. said this,
“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. Limited funding may become available for disaster areas declared in 2008, or in disaster areas declared for Hurricanes Katrina and Rita. Limited funding may also become available as prior Agency commitments are de-obligated, however, such funding will be very limited. We apologize for any inconvenience this may cause you.”
How to avoid missing ‘the boat’ on your USDA Loan?
Understand how this timeline works. You do not have to close on your home by the aforementioned timeline suggested, ‘end of April’, you have to have reserved your funds before this time. When you find a house you are ready to buy, your lender communicated with USDA to reserve those funds, and USDA will hold the funds you requested until you close on the home. Therefore, you can reserve the funds persay in middle of April, assuming that the funds do not exhaust sooner than expected, and then you can close in May or even June.