The USDA runs out of money each year generally between July and September because the Federal budget ends on 9/30 of each year. This year will likely be no different. In years prior most big banks would go ahead and fund the loan so the buyer can close once they received the guarantee from the USDA, then when new appropriations are received from Congress they will deliver the loan guarantees for payment.
Who knows if the banks will take that position this year.
As for your first question, unlike the FHA or VA loans the USDA is both a lender and guarantor. There are two products a buyer would use to purchase a single family residence;
1)
Guaranteed Rural Housing Development; this loan is not offered by the USDA directly to the low to moderate income consumer to purchase homes in rural areas only and it is offered by banks and mortgage companies who are designated lenders. in this case the USDA acts as guarantor only.
2)
Direct; this is subsidized loan product for low income buyers and it requires re qualification every two years and has a demand feature if your earnings exceed the program requirements. It also has a perennial recapture; meaning when you sell the home, regardless of when, you
WILL pay back all ofthe subsidy and I think there may be a 50% revenue "share" with the USDA. In this case the USDA is both lender and guarantor
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