Tuesday, May 4, 2010

USDA Rural Development Depleted: Congress Working on A Fix

Rural Housing Program Funds Exhausted in Early May – Congress is Working on A Fix
Last week the US Department of Agriculture (USDA) Rural Development announced that the Single Family Housing Guaranteed Loan Program will likely be exhausted by May 7, 2010. Previously, USDA believed the program would be exhausted by April 30, 2010. Depending on Congressional activity, the Agency may consider issuing conditional commitments.

Recently, the House of Representatives passed HR 5017, the "Rural Housing Preservation and Stabilization Act of 2010", sponsored by Reps. Kanjorski (D-PA) and Capito (R-WV). The bill allows the Secretary of Agriculture to increase the upfront premium for 502 single-family loan guarantees up to 4 percent in order to make the program self-sufficient. This fee may be rolled into the loan. The fee increase was necessary because the program has exhausted all funding. On April 27, 2010, Senator Bennet introduced S 3266, the companion bill to HR 5017. The bill was referred to the Senate Committee on Banking, Housing, and Urban Affairs.