USDA Rural Development Loans

USDA Rural Development is out of money!?!

No not exactly. There are 2 different types of rural development loans.

1. USDA Rural Development Direct Program - This mortgage is written directly through a USDA Rural Development office. Thier loans are direct from the government and are funded by a continuing congressional appropriation. USDA Rural Development goes to congress and requests a certain amount of funds. The last time they did this they underestimated the amount of funding they needed and have run out of funds. They will receive their next appropriation in March of 2009 and have funds again.

2. USDA Rural Development Guaranteed Program - This mortgage is written by lenders such as Premier Mortgage Capital, Inc. Once underwritten these loan files go to the state Rural Development office and that office provides a conditional commitment which allows the loan to be guaranteed by USDA. Since the funds come from the lender and not the government this program continues business as usual even when the direct program is out of funds.