USDA has been "out of money" for a couple of weeks, and they finally have a couple of dollars (2.5 Billion) to loan! We get Rural FAST in North Carolina - which is why USDA Rural Development Loans are so important!
People who purchased and want to take advantage of the Tax Credit, are now waiting to see if USDA can underwrite their loan fast enough to be able to close by the end of June... and since there is a back log, there's no guarantee.
USDA charges a "Funding Fee" - similar to the Upfront MIP that FHA charges, and the Funding Fee VA Mortgage Loans have (for more information on Funding Fees click here). The actual fee has been 3.5% - and the US Government has been "subsidising" the fee so that the consumer only paid @2%.
With the new money - comes higher "Funding Fees" - the new Funding Fee paid by Consumers is 3.5%. This means that is you purchase a $100,000 home - your loan amount is $103,500. There's not a monthly charge for PMI, and there's no REFUND if you pay your home off early... but the interest on that additional $3,500 is tax deductable!
If you want to know more about qualifying for a USDA Home Loan in NC, click here.
Many people are trying to get their tax credit by having their loan approved by USDA by the end of the month... to those folks I would urge extreme patience. We've lost almost 3 weeks -with a huge number of files waiting for USDA review. It's going to be a tight wire finish. If your file is not already approved by your lender and TO THE USDA office in NC by the 5th of June - I think you might lose this credit. It's just my opinion - but I would be doing everything I could to get my file to the USDA office FAST. Then it's a waiting game.
We specialize in USDA Home Loans in NC. If you are interested in getting qualified for a USDA Mortgage Loan, or you are ready to refinance a USDA Home Loan, please call Steve and Eleanor Thorne, FFSi, 919-649-5058