The U.S. Congress passed legislation this week to restore funding to the 502 single-family rural housing program, more commonly known as USDA. The program allows 30-year originations primarily for low-income families to purchase households or renovate the ones they already own with no down payment at the time of application. Loans are guaranteed by the federal government. Section 502 Rural Housing Services Single Family housing Guaranteed Loan Program, as it’s formally called, was originally discontinued because in May because it had exhausted its existing funds of $13.1bn.
This issue has been working its way through Congress since March and comes as welcome news to the real estate industry. The legislation will increase the guarantee fee for borrowers, but still allows it to be financed, which will make the program self-sufficient. The legislation also increases the commitment authority so Rural Housing Service can formally guarantee loans (they had been providing conditional commitments). We anticipate a notice from Rural Housing shortly after the President signs the bill. Senator Michael Bennet (D-Colo.), and Representatives Paul Kanjorski (D-Pa.) and Shelley Moore Capito (R-W.Va.) were pivotal in moving the bill to passage in both houses.
Mission Mortgage is highly experienced in providing USDA loans – please contact us if you have any questions at firstname.lastname@example.org.