Is your lender’s USDA approval time affected by USDA’s fiscal year-end?

Don’t let a lender hold up your closing because they say the “USDA is out of money”!

USDA’s fiscal year runs from October 1st until September 30th and at the beginning of each fiscal year, the USDA Single Family Housing Guaranteed Loan Program has a temporary lapse in funding. As a result, we are often asked if a home buyer’s USDA approval time will be affected.

Today’s video will break down exactly what happens during this short window of time and explain why you should not worry, despite what you may hear from other lenders or loan officers.

Also, don’t forget to download our FREE USDA Blueprint for Success. This fantastic educational resource is great for real estate professionals and home buyers alike.

USDA Temporary Lapse in Funding – What are the facts?

The USDA fiscal year ends on September 30th and funding for the guaranteed loan program is not available for a short period of time… approximately 2 weeks.

However, this does not mean that that the USDA program is stopped in its tracks. In fact, during the temporary lapse in funding, Rural Development will continue to issue Conditional Commitments “subject to the availability of commitment authority” for purchase and refinance transactions.

USDA Approval Times – Know who your lender is!

So, what does this temporary lapse in funding mean to home buyers and realtors? Quite simply, it’s lender specific.

Depending on how a lender is set up to do business, this will determine if they are able to continue processing and closing USDA loans without interruption.

The great news is that here at “Metroplex”, we continue to accept, process, and fund USDA loans without delay!

Thus, your USDA approval time does not change.

Timeline of key events

Here is an overview of what to expect as a home buyer during this time of the year:

1. As a USDA approved lender,  we will continue to submit applications for purchase and refinance loan transactions.
2. USDA Rural Development will process, approve, and issue conditional commitments for eligible applications.
3. Upon receipt of the USDA conditional commitment, loans will continue to close as scheduled.
4. When funds become available, USDA Rural Development reserves funds for issued conditional commitments.
5. Once these loans are obligated, the loan closing is verified and all conditions of the Conditional Commitment are met, USDA Rural Development will process the lender’s Loan Note Guarantee request.

Remember, this is only temporary, and with the right lender, like Metroplex, there are no loan delays.

Lastly, if you are hearing rumors about the USDA being currently out of money or having loan delays, then beware of your lender. Might I suggest our 2nd opinion service? It’ complementary and is great for both pre-qualifications and loans in progress. That way, with our expertise and experience, you’re mind will be put at ease.

Just call or email to discuss your scenario and let us show you the “Metroplex” difference!

(800)806-9836 Ext. 280
SeanS@MPLX.org

Don’t forget, you can download any one of our FREE USDA resources here!