Rural Development finally announced today that they will continue to issue Conditional Commitments once the appropriated funds for fiscal year 2010 have been exhausted. The new commitments will be "subject to the availability of funds and Congressional authority..." Which is good news, considering that as of Friday they were down to only $20,000 in the state of Oklahoma.
The Oklahoma state office for Rural Development had requested last week for additional funding to be transferred from other states carrying a surplus, but that request was still pending at the time the announcement was made today.
What does this mean exactly? Quite simply: RD loans continue! We at Neighborhood Mortgage Group will continue to underwrite and close these loans, even with the "subject to..." condition. It's business as usual for Neighborhood Mortgage Group.
But let's not jump for joy just yet. There is a slight down side. And that is that the RD Funding Fee (the fee a Buyer pays to RD to guarantee the loan) has now be raised from 2.0% to 3.5%. For example, a Buyer borrowing $100,000 would have paid a funding fee of $2,000 last week but would now pay $3,500. However, RD will continue to allow Buyers to roll this fee into their loan in lieu of paying the fee in cash at closing.
My final word on the RD program? It's still the best program on the street (unless you're eligible for a Veteran's loan.) The combination of no down payment required, allowing the Buyer to finance their closing costs into the loan, the avoidance of paying PMI (private mortgage insurance), and with interest rates still in the low 5%'s make this loan a big favorite.
Apply online today @ www.neighborhoodmg.com or call us at (918) 246-7100.
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