The USDA Loan program is projected to run out of money by month’s end. A new bill which recently passed in the House could help to keep loans available, if it passes the Senate vote. USDA home loans are loans that are available only to people that live in rural areas. While a private institution lends the money and services the loan, these loans are 100% guaranteed by the government. They have become increasingly popular to homeowners that qualify for them.
The house bill, entitled the Rural Housing Preservation and Stabilization Act of 2010 would keep funding available for these home loans through the end of the fiscal year which is September 30, 2010. The bill was introduced by Congressman Paul E Kanjorski of PA. According to Kanjorski,
“Since its creation in 1987, USDA’s affordable rural home loan guarantee program has helped hundreds of thousands of families to realize the American dream of homeownership, including many in Northeastern Pennsylvania. As a result of the unprecedented demand, the program is now unfortunately running out of money. At no cost to taxpayers, my bill will preserve the access of millions of families living in America’s heartland to needed USDA loan guarantees, so that they can continue to buy homes with affordable mortgages. Without action, too many families in rural America will have no options for getting home loans. We cannot allow that to happen.”
The National Association of Realtors strongly supports the bill complimenting the House for its fast action in voting on and passing the legislation. They are now are urging the senate to take swift action in passing it. National Association of Realtors President Vicki Cox Golder stated:
Fast passage is critical to our nation’s rural citizens, and needs immediate congressional attention. The Senate’s failure to act in a timely manner would create a gap in the home buying process and unnecessarily burden poor families in rural areas. As private mortgage markets have dried up, many rural families will be left out in the cold without these guaranteed loans. Increasing the commitment authority will assist rural families, support local housing markets, create jobs and generate new tax revenues.
While there are no guarantees, the new bill is expected to pass the Senate. As long as it does, the legislation will allow for an additional $30 billion in USDA loans.