USDA Funds Secured

As most everyone knows the lending environment has changed drastically the last 12-18 months and with this has come the elimination of the Fannie Mae and Freddie Mac 100% loans as well as more strict and scrutinized lending guidelines. As alternative means to try and fill this niche the familiarization and utilization of the USDA / "Rural Development" loan has taken the lead as one of the biggest growing programs. Volume for this program has almost doubled since Fiscal Year 2007 and is accelerating. USDA (United States Department of Agriculture) is adding approximately 50 new participating lenders each month. The tremendous growth and utilization of this program has put a strain on the original appropriation amount of $4.1 billion plus the $1.5 billion of carry over and disaster funds. USDA guarantees are limited by the budget; so when demand exceeds supply additional funds must be sought and found.

To try and meet the demand for the program USDA Secretary Ed Schaefer has directed $1.1 billion of additional guarantee funding be moved into the Section 502 Guaranteed Loan Program. This program has become very popular for two very specific reasons. First, its currently the only 100%+ financing available in today's market. Second, in case of default the USDA guarantees 90% of the financed amount so the risk to the servicers and holders of this product are extremely limited. Continue to check back for updates as we will do whatever is necessary to keep our audience up-to-date with ongoing news and changes.

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