I just heard the news today that USDA (United States Department of Agriculture) Rural Development has put a freeze on its funds for all of their loans nation wide. Up to this point we have had no problem getting people that qualify into this type of loan for little or no down payment. This is not just for low income Nevada homes. This has been a great alternative to the FHA which requires a minimum 3.5% down.
The USDA encourages growth and wants small towns continue thrive. Many of the nations agriculture comes from small towns and cities that have under 20,000 people. The USDA Rural Housing loans are geared to help people stay in small towns and by offering them direct and guaranteed loans. Some of these loans are 100% loans with no down payment needed. Others are at lower interest rates, as low as 2-3%.
These price freeze has hit at a horrible time as many home buyers are trying to take advantage of the Home Buyer Tax Rebate Program. The first phase said the contract had to be written on or before April 30, 2010 and the second phase says the home purchase must be completed by July 30, 2010. With no funds, this is looking bad for those that were looking forward to and believed in the funds being available to take advantage of the Rebate.
The USDA was told about 10 days ago to put a hold on all the funds that were not already committed. They were also told that they would have word within 48 hours and as of today have still had no answer and FUNDS ARE ON HOLD.
We have been told that a bill has passed the US House of Representatives and is now at the US Senate to get the funds restored. Let us hope and pray this happens quickly! We are not experts on USDA loans but we feel that you should know that the USDA loans are at least temporarily on hold.
Article written by Brandon Park of the Mesquite Real Estate Team from Bowler Realty. Bowler Realty is a Licensed Real Estate Brokerage for Nevada and Arizona.
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