The U.S. Senate is expected to act early next week on legislation to extend funding for the USDA Rural Housing Services Single Family Loan program to authorize additional commitment authority and funding through the end of the year. This will pave the way for the USDA to give lenders authority to provide 502 loan commitments for their borrowers waiting for these loans. MHI sent letters to Congressional Leaders urging quick action to provide additional funding authority.

The additional loan commitment authority is included in a large funding bill, H.R. 4899, the Fiscal Year 2010 Supplemental Appropriations Act. The bill will also make the 502 program self-funding for the first time by increasing the maximum loan guarantee fee that the USDA can charge for new home purchases from 2.0 to 3.5 percent and allows an annual fee of not more than 0.5 percent per year on the balance of the loan. The bill would also enable the Rural Housing Service to waive these fees for low and very-low income borrowers for up to $679 million in loans.

H.R. 4899 has already passed the house, and after the differences between the two measures are reconciled, the bill will be sent to the President for his signature. MHI will keep you advised and let you know as soon as additional loan commitment authority becomes available.

MHI members can contact Lois Starkey at lstarkey@mfghome.org.