USDA Funding Shortfall Leads to Changes-Update

For many looking to purchase a home, the government’s USDA program (100% financing) is the preferred option.  However the money for the program has fallen short.

As we previously posted, because of the funding shortfall, the USDA program is receiving additional scrutiny because of its  no downpayment provision and 2% guarantee fee.  The House of Representatives has now passed a bill extending the USDA housing program.  The bill raises the guarantee fee to 3.5% (from 2%).  Last week, Barney Frank, Chairman of the House Financial Services Committee, mentioned that conversations were underway with the Senate and was hopeful that the extension could be completed before funding expired in early May.

We’ll keep you posted of any new legislation or changes that could affect the way you buy a home.

Post Contributed by Shane Siniard with WR Starkey Mortgage

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