How the shutdown will affect Home loans

Add your thoughts here… (oUSDA Loans

The USDA has a long history of running out of money by the end of their fiscal year which is September 30 and this year is no exception. In years past, lenders would continue to underwrite and approve and fund these loans with the promise (loan approval) from the USDA that upon congressional replenishment if their funds, they would issue the guarantee.

USDA files can continue to be processed, underwritten and shipped to USDA; however no Conditional Commitments will be issued until the shutdown is over.

Reminder that the October 1st change to eligible locations has also been put on hold for the moment but it is unknown if the change to the new list will be backdated to 10/1/13.

Originators may continue to accept and process loans that would be eligible under an old area but not under the new designated areas; however recommend making clients aware that loan may need to be switched to FHA program if property is deemed no longer eligible.

However, because this year it is expected that many of the USDA eligible maps will be re-drawn, this could impact buyers who otherwise may have been shopping in an area that was slated to be no longer eligible for USDA housing. Lenders who in the past may have accepted the approval and promise to issue the guarantee, my not be so eager to fund those loans until congress fully funds the USDA Rural Housing Development program.ptional)

7 thoughts on “How the shutdown will affect Home loans

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s