Well, the program is now back through the help of the H.R. 4899 Supplemental Appropriations Act of 2010, but with a caveat. Previously, there was a 2% one time funding fee for all borrowers who obtained a USDA loan. However, the program now has increased its funding fee to 3.5% of the loan amount for all borrowers. This will make the loan a little costlier to obtain for borrowers, but the program continues to have no down payment requirement and no mortgage insurance, still making it an affordable option for many. In addition, the increased funding fee will help to preserve the program and keep it from running out of funds for the rest of the year and going forward.
This is a positive development for borrowers looking to purchase a home in Rural Housing designated areas. As always as additional information becomes available we will provide updates.
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