USDA Funding Is BackDate: September 8, 2010
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Yesterday – September 7, 2010 – USDA Rural Development announced that beginning September 8, 2010 it will once again start issuing Conditional Commitments without the "subject to funding" language. Going forward Conditional Commitments will be issued through the end of the Federal Government fiscal year, which is September 30, 2010. In addition, USDA announced that its automated approval engine, GUS or Government Underwriting System, has been updated to reflect previously announced changes to the USDA Commitment Fee.
Prior to new loans being approved for Conditional Commitment, USDA will need to clear the backlog of loans that have Conditional Commitments with the "subject to the availability of funds" statement that lenders have been funding since May 26, 2010.
This is fantastic news for lenders that have continued to close and fund USDA Rural Development Loans since May 26, 2010 as these loans required the lender to assume a level of risk pertaining to changes to the borrower's financial condition and default potential of the borrower. To combat this additional exposure to risk, many Underwriters have been approving loans much more conservatively since May 26.
Now that Underwriters once again have access to GUS, homebuyers using the USDA loan program will find that:
|Credit and debt ratio waivers will once more become available|
|Borderline applicants will more readily obtain credit approval|
|Underwriting turn times will improve as Underwriters are no longer required to manually underwrite each file|
If you are considering financing an upcoming home purchase using a USDA loan and want to learn more about your financing options through the USDA Rural Development Loan Program complete the contact form or call (866) 305-7808 to speak to your local Maryland loan professional.
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