Thursday, September 24, 2015

2016 USDA Funds Availability

It's that time of year again... see below for an update from USDA Rural.

REMINDER: The Upfront Guarantee Fee will increase from 2.00% to 2.75%. 
The Annual Fee will remain unchanged at .50%.

September 24, 2015
Fiscal Year 2016 Conditional Commitment Notice
As happens at the beginning of each fiscal year, funding for the Single Family Housing Guaranteed Loan Program (SFHGLP) will not be available for a short period of time at the beginning of Fiscal Year 2016 (FY 2016), which starts October 1, 2015.  During the temporary lapse of funding, Rural Development will issue Conditional Commitments “subject to the availability of commitment authority” for purchase and refinance transactions.  An upfront guarantee fee of 2.75 percent accompanied by an annual fee of 0.5 percent will apply to both purchase and refinance transactions in FY 2016.

The following will apply:
Rural Development will continue to accept complete SFHGLP applications for purchase and refinance loan transactions from lenders.
Rural Development will process, approve, and issue Conditional Commitments (Form RD 3555-18) for those applications that are eligible “subject to the availability of commitment authority.”
Lenders may close loans as scheduled.
When funds become available, Rural Development will “Obligate” funds for Conditional Commitments issued for loans subject to the availability of commitment authority.
Once loans are obligated, Rural Development will process lender’s Loan Note Guarantee requests as soon as the loans are verified as being closed and all conditions of the Conditional Commitment are satisfied.
Lenders assume all loss default risk for the loan until Rural Development is able to obligate it and the Loan Note Guarantee is issued.

Questions regarding this notice may be directed to the Single Family Housing Guaranteed Loan Division, at 202-720-1452.
Keep in mind there are other low down financing options such as the VA Loan for qualified Veterans, FHA, or Conventional with private mortgage insurance that may be a better fit. A side by side comparison will guide you in choosing the right home loan based on your individual needs and goals. If you would like more information or to apply for any of these loan products contact me today!

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