It has recently been announced that the USDA loan program will be out of money by the end of April 2010. In any typical year the USDA loan program has plenty of funds to make loans through the end of the year. Over the last few years as other “0” down loan programs have disappeared, USDA has stepped up to fill the void and provide affordable “0” down loans for first time homebuyers across the nation. This increased demand for USDA loans has led to a shortfall the last two years in funds needed to keep this program solvent. Last year the stimulus money was used to bridge the funding gap and business went along as usual. This year however there is no stimulus money left to bridge the funding gap and it looks like that sometime in April we will be out of funds and USDA will stop issuing commitments until their normal refunding takes place (sometime in the late fall).
This will hasten the slowdown that I have predicted will happen after the June 30th deadline for the FTHB credit and as I have said remove the last “0” Down, affordable mortgage program available in today’s market. If the government is truly trying to increase the availability of affordable alternatives when financing a home then they need to refund the program immediately. Think of all the homeowners who had planed to use the USDA program over the next couple of months to help them qualify for the FTHB tax credit, those borrowers are now left with no viable option.
I have included a list below of the members of the “United States Senate Committee on Appropriations, Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies”. Try and say that with out taking a breath or try putting it on a business card.
- Senator Herb Kohl (Chairman) (WI)
- Senator Tom Harkin (IA)
- Senator Byron Dorgan (ND)
- Senator Dianne Feinstein (CA)
- Senator Richard Durbin (IL)
- Senator Tim Johnson (SD)
- Senator Ben Nelson (NE)
- Senator Jack Reed (RI)
- Senator Mark Pryor (AR)
- Senator Arlen Specter (PA)
- Senator Sam Brownback (Ranking Member) (KS)
- Senator Robert Bennett (UT)
- Senator Thad Cochran (MS)
- Senator Christopher Bond (MO)
- Senator Mitch McConnell (KY)
- Senator Susan Collins (ME)
Call your local Senator or email then to let them know the importance of this funding….
John McClellan – Supreme Lending