Rural Development Funding - (RD) Loans Running Out?

Are you planning on financing your home purchase through a zero down RD Loan? If so, you better read on!

The Traverse City Area Rural Development Office recently sent out a notice announcing that program funding for the Single Family Housing Guaranteed Loan Program will likely run out by the end of April 2010. This announcement is very important for prospective home purchasers and especially first time home buyers in the Traverse City area. Not only will first time home buyers in Leelanau County and Grand Traverse County see the incentive for the First Time Home Buyer Credit expiring soon but now they might not be able to receive financing through a RD Loan. These RD Loans have become very popular recently due to the fact that many first time home buyers who qualify can purchase a home with zero down-payment. If RD Loans become unavailable in Michigan (even for a short time) the nearest low down payment alternative would be FHA which requires a minimum of 3.5% down payment and reduces the amount of cash back the seller can provide towards closing costs and pre-paids. The last think we would want is for one of our clients to get ¾ of the way through the home buying process just to find out there is no longer a RD loan available to them! If you are thinking about buying a home, now is probably the time to move forward if you are considering a RD Loan! RD Loans are a great zero down option in this market!

Jonathan Oltersdorf
Oltersdorf Realty, LLC
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You can find the official notice below:

“This message is to notify you that program funding for the Single Family Housing Guaranteed Loan Program will likely be exhausted by the end of April, 2010.

Once funding is exhausted, the Agency will not issue Conditional Commitments “subject to receipt of appropriated funds.” This is because it is not certain when additional funding will be available.

Limited funding may become available for disaster areas declared in 2008, or in disaster areas declared for Hurricanes Katrina and Rita. Limited funding may also become available as prior Agency commitments are de-obligated, however, such funding will be very limited.

We apologize for any inconvenience this may cause you. Should you have any questions, you may contact the Single Family Housing Guaranteed Loan Division at (202) 720-1452.”