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Old 02-11-2009, 04:35 PM
 
Location: Albany, OR
540 posts, read 1,896,436 times
Reputation: 356

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I heard something in passing today - thought I'd check it out here...where the people who KNOW go.

One of only 2 100% financing programs available in today's environment - the USDA rural development loan program is a great opportunity for certain home buyers. But I have 2 questions:
(1) Is USDA the lender or the guarantor of the loan (like VA)?
(2) IF USDA is the lender - are they currently funded? One of my local mortgage guys made the comment (I got it 2nd hand) that they were 'out of money.' Is that true?

thanks!

Dave
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Old 02-11-2009, 04:57 PM
 
2,197 posts, read 6,594,651 times
Reputation: 1684
This has been discussed in numerous threads. A search will probably give you lots of info. (I believe the consensus was, yes, they seem to be out of money.)
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Old 02-11-2009, 05:51 PM
 
Location: Great State of Texas
86,093 posts, read 69,914,204 times
Reputation: 27520
There might be some new money for it in the stimulus package just passed.
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Old 02-27-2009, 08:51 AM
 
779 posts, read 2,965,589 times
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A friend just called their local bank on this this past Monday. They had money but she warned that the interest rates are higher to get it.
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Old 03-01-2009, 04:21 PM
 
Location: Raleigh
82 posts, read 178,377 times
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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

Last edited by ricardocobos; 03-01-2009 at 04:29 PM.. Reason: substance
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Old 03-04-2009, 02:37 PM
 
34 posts, read 254,560 times
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and how can you obtain such loan???
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Old 03-04-2009, 08:42 PM
 
Location: Cary NC
553 posts, read 2,082,426 times
Reputation: 303
Quote:
Originally Posted by DavePautsch View Post
I heard something in passing today - thought I'd check it out here...where the people who KNOW go.

One of only 2 100% financing programs available in today's environment - the USDA rural development loan program is a great opportunity for certain home buyers. But I have 2 questions:
(1) Is USDA the lender or the guarantor of the loan (like VA)?
(2) IF USDA is the lender - are they currently funded? One of my local mortgage guys made the comment (I got it 2nd hand) that they were 'out of money.' Is that true?

thanks!

Dave
Taylor Bean and Whittaker (Portfolio lender) are still funding USDA loans regardless. https://www.taylorbeandirect.com/default.aspx
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Old 03-04-2009, 08:43 PM
 
Location: Cary NC
553 posts, read 2,082,426 times
Reputation: 303
Quote:
Originally Posted by DavePautsch View Post
I heard something in passing today - thought I'd check it out here...where the people who KNOW go.

One of only 2 100% financing programs available in today's environment - the USDA rural development loan program is a great opportunity for certain home buyers. But I have 2 questions:
(1) Is USDA the lender or the guarantor of the loan (like VA)?
(2) IF USDA is the lender - are they currently funded? One of my local mortgage guys made the comment (I got it 2nd hand) that they were 'out of money.' Is that true?

thanks!

Dave

And oh Homepath is another 100% alternative if the borrower is willing to buy a home that is being sold by Fannie Mae in the area your service. 100% no PMI less that perfect credit okay
REO search (http://reosearch.fanniemae.com/reosearch/ - broken link) You can search for listed properties meeting this criteria here
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Old 03-05-2009, 06:38 AM
 
Location: Raleigh
82 posts, read 178,377 times
Reputation: 46
Mirela Your local bank is always a good place to start because you know them and they know you however a list of qualified lenders is available at the USDA website;Approved Lenders
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Old 03-16-2009, 02:06 PM
 
18 posts, read 48,189 times
Reputation: 11
I just locked a 5% rate (5.253% APR) with .25% discount points with USDA through National City Mortgage. The never mentioned USDA being out of money, and we are getting our loan through them, so I am sure they are still available if the house qualifies.
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