H.R. 5017, The Rural Housing Preservation and Stabilization Act of 2010 (2404 comments ↓ | 4 wiki edits: view article ↓)

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H.R. 5017 would ensure the availability of loan guarantees for rural homeowners.

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Here are some more of the bills the House of Representatives will debate this week. S. 3253 – To provide for an additional temporary extension of programs under the Small Business Act and the Small Business Investment Act of 1958 H.R. 5017 ...

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Tommy Coleman

April 21, 2010, 4:31pm (report abuse)

I hope this bill can pass and preserve a very worthwhile program for the remainder of this year and into the future. This program grants the opportunity for legitimate homeownership and is not a "give me" entitlement program. However, the proposed 3.5% upfront and .5% ongoing annual guarantee fees are truly excessive and might just kill the program the bill is trying to preserve.

Tim Cornelison

April 23, 2010, 9:07am (report abuse)

The changes will not kill the program but will allow it to become self sustaining and enable it to remain viable in the years to come. The proposed in guarantee fee (insurance) structure mirrors what the FHA program was in the 90's and will allow the program to thrive without the annual gut check of running out of funds at the end of the peak selling season.

Chad Stansell

April 23, 2010, 11:06am (report abuse)

How long is this process and when will we know if this Bill has been passed? I'm a Mortgage Banker in rural America and it sure would be nice to know.

Lisa Gergets

April 23, 2010, 3:32pm (report abuse)

I'm a buyer just getting ready to apply for a USDA guaranteed loan. Will the 3.5% and .5% ongoing fees be passed down to the mortgage applicants?

Scott Westemeyer

April 23, 2010, 4:27pm (report abuse)

Lisa G., yes those fees will be passed down to the applicants. There's a 2% upfront premium currently and that's being raised to 3.5%. There's also going to be a 4% fee passed on to the lenders which could really hurt pricing and rates, but not sure how they plan on passing it on yet.

Scott Westemeyer

April 23, 2010, 4:28pm (report abuse)

Also, just so you know, the upfront premium is usually rolled into the loan so it won't be a part of your cash to close.

Jeremy Wilkerson

April 24, 2010, 6:13am (report abuse)

I currently have an application being processed in my states usda office. It went in on Friday. I obviously have a home under contract and am figureing the 2% on top of my loan. I really hope they do not but it up to 3.5% with the .5% annual fee cause then i wont be able to afford it.

Angela Thornton

April 25, 2010, 9:27am (report abuse)

More than likely the 3.5% up front fee will be allowed to be rolled in just like the 2% fee is now. the .5% will be added to your principal balance. However, I've read H.R. 5017 and I cannot find any mention of a 4% fee required by the lender - can someone please provide evidence of this in the legislation?

Angela Thornton

April 25, 2010, 9:34am (report abuse)

I think I understand what is being said....there isn't an ADDITIONAL 4% that the lender must provide, the lender will send a check to USDA at the time of insuring for the 3.5% fee and more than likely the first installment of .5% fee. (They've not set up their ACH pay system through pay.gov yet like FHA and VA) - I think USDA is smart enough to know that requiring the lender to pay 4% would negate the legislation and kill the program out in the field.

Jeff Wilmoth

April 26, 2010, 5:06pm (report abuse)

The fee mentioned in H.R. 5017 is an adjustment to the current 2% guarantee fee collected on all USDA loans. The proposed bill could increase the guarantee fee from 2% to 3.5% if passed. These fees are usually always rolled into the loan. For example, the loan is currently considered 102% when the fee is rolled into the loan amount. If the fee increases to 3.5%, then the loan would be 103.5%.

Alex F

April 26, 2010, 8:27pm (report abuse)

When do they vote on this?


April 27, 2010, 4:04pm (report abuse)

What about the Direct Loan USDA loan? Is that gone? When do you all think this funding will be released or available?

Margot Hornbloewr

April 27, 2010, 4:10pm (report abuse)

The Direct Loan-(USDA Direct)is not facing a shortage of funds at this time. They have plenty of funds, this is per our Michigan USDA office.

David P

April 27, 2010, 4:40pm (report abuse)

It just passed in the House with a vote of 352-62.

Mike D

April 27, 2010, 5:29pm (report abuse)

Margot, when they say plenty of funds, what do they mean? And if those funds run out after the legislation is passed, does that mean that loans funded with that money will be subject to the terms in this legislation, do you think?

mona L

April 28, 2010, 11:28am (report abuse)

Does this bill have to be signed by anyone else or is the program good to go?

Mike D

April 28, 2010, 11:35am (report abuse)

Mona, this needs to pass the Senate and President Obama needs to sign.

Mark Agnes

April 28, 2010, 11:55am (report abuse)

I hope it passes, it will help continue to jump start the housing sector, i hate government programs but i think this is actaully a good one

Dave D

April 28, 2010, 12:24pm (report abuse)

I looks like the upfront fee in the amended bill went to 4% but they eliminated the annual .5% fee (similar to FHA). That should help A LOT!

Frank M

April 28, 2010, 8:38pm (report abuse)

Dave D where did you see that they eliminated the annual fee?

Alex F

April 28, 2010, 11:16pm (report abuse)

"The original bill allowed the Agriculture secretary to assess a 0.5% annual fee on the loan balance, but the measure was dropped during a committee markup."

Anyone know when the Senate will vote on this?

Mike D

April 30, 2010, 5:08pm (report abuse)

So, any word on whether or not the USDA guaranteed loan program has run dry yet? I figured there'd be an announcement if it had.

Alex F

April 30, 2010, 5:18pm (report abuse)

I called USDA earlier today and they said it'll run out of money by May 6th or 7th. Have not heard anything about when there will be senate vote on h.r. 5017.

John Anderson

May 2, 2010, 7:10pm (report abuse)

This program is being abused by the big builders to get people into homes they cannot afford. People need to make a down payment instead of getting 104% financing. Starting out underwater is not a good idea.

This is also being used for build suburban developments - not exactly the rural 'heartland' program it claims to be.

I say make at a 3.5% down program, no financing of the guarantee fee and limit it to true rural areas.

Chris M

May 2, 2010, 11:10pm (report abuse)

Hey john, just so you know, they call that a FHA loan.

John Anderson

May 3, 2010, 10:04am (report abuse)

Yes Chris - I know FHA has a program like this. I also know that when FHA allowed the builders to make the downpayment (although hiding it in 'charitable' programs) the defualt rate was much higher. If we have learned nothing in the recent lending mess it is that buyers with no skin in the game don't make as much an effort to keep paying the mortgage as those that do.

I think the USDA program is the latest refuge for people that perhaps should not purchase a home at this time.

Shane Milne

May 3, 2010, 1:09pm (report abuse)

John, you should check USDA's default rates vs. FHA's when they permitted the seller/builder to pay the borrowers down payment. USDA has a significantly lower default rate. Same with VA, VA financing is 100% financing and also finances in the VA Guarantee fee, and it too has a lower default rate than FHA.


May 3, 2010, 1:19pm (report abuse)

i've been waiting for over 2 weeks for a commitment letter, any idea when this might happen


May 3, 2010, 3:33pm (report abuse)

If a buyer has been pre-approved for a USDA loan in March, are those funds guaranteed or could the lack of funds effect him? USDA has had the loan info since April 8.

Alex F

May 3, 2010, 4:48pm (report abuse)

I would agree with Shane. Though I agree with Mr. Anderson's assertion that 0% down financing is a big part of the mess we are in, he may be a bit misinformed about this program. The default rate for these loans is considerably lower than the national average--0% in some regions. This is an exemplary program in its effectiveness, efficiency, and its success in assisting mid-to-low-income families in getting quality and affordable housing. This program should be the poster child for how government programs can/should work. If this program is extended by this bill, not only will it continue to function as it does, but it will essentially pay for itself. The guarantee fee, the careful, methodical oversight, and the fixed rate make this a very different scenario from the kind of irresponsible lending that caused the current housing crisis and it would be a mistake to eliminate programs like this based upon a flawed understanding of their true nature.

that guy

May 3, 2010, 7:15pm (report abuse)

@ slacker. if your file is not underwriten or fund not yet resevered by your local USDA field office you have nothing but a worthless GUS approval. be concerned.


May 3, 2010, 11:47pm (report abuse)

My boyfriend just paid ernest money for a house we are trying to get this rural financing for. We are trying to decide to move forward and risk the expense of apprasial and inspection or try. To back out and see if we can get our ernest money back...any ideas? Help.

Kyle Williams

May 4, 2010, 12:49pm (report abuse)

Jess - chances are, if your lender can get a full file to USDA by the middle of the month, you'll be guaranteed funds. The file has to be received by the local USDA office that will underwrite it (depending on your zip code). The file first has to go through your lenders u/w department and deemed deliverable to be sent to USDA...which may take some time. I would wait on the inspection, and only order the appraisal if it is necessary depending on your lender (which it probably will be). Keep in mind that your contract (depending on your state)should have a financing contingency so if USDA does not allocate more funds, or your file does not get guaranteed in time, you will get back your earnest money.


May 4, 2010, 1:59pm (report abuse)

Thank you all for the helpful hints! Appreciate it!


May 5, 2010, 7:44am (report abuse)

My buyer got his USDA loan. Sounds like he got in just in time.

Honest Lending

May 5, 2010, 10:48am (report abuse)

The USDA Loan has been my #1 loan for 10 Years in the Mortgage Industry. I live in a County that is 100% eligible. The Default / Forclosure rates on the USDA Loan are a Fraction of those of the FHA Loan - this is because of Stricter Credit and Underwriting Standards. This is not a 'give me' loan - and it does not allow for those risky Borrowers to get into a home for $0.00 down. If you believe that THIS Loan is the cause fo the mortgage forclosure boom you are sorely mistaken - the forclosure boom was caused by the $0.00 SUBPRIME loans that allowed people to move into a home with a 480-580 Score with no money down, no income verifiction, and terrible underwriting standards. This is not the case with the USDA Loan. I challenge you to provide Federal FIGURES that back up any statement you make regarding any negative you present regarding this loan. I look forward to hearing whether or not this bill has passed the Senate very soon!

North Carolina Buyer

May 5, 2010, 1:53pm (report abuse)

Honest Lending, you are 100% right! I am tired of hearing the media state that the 100% mortgages were the cause of the mess and not hear many people speaking up with the truth. Thanks!


May 6, 2010, 10:40am (report abuse)

just got my commitment letter, but now i'm told it has to go through the usda agian for final. what heck anybody else going through this

that guy

May 6, 2010, 5:34pm (report abuse)

@ japes. the only reason your has to go to USDA for 2nd time if something has changed. unless you ment it was a commitment from lender and now USDA has the issue there commitment. which is standard process.

Mike D

May 6, 2010, 11:15pm (report abuse)

Hey, anyone know what the current status of funding is presently? This bill seems to be held up in line behind the infamous Financial Reform bill.

Shane Milne

May 7, 2010, 11:54am (report abuse)

$328.8 million remaining for purchase funds as of today.

Diane W

May 7, 2010, 2:19pm (report abuse)

we got our approval from underwiters today, and the appraisal will be done next week, and then the folder will be sent to USDA. WHat are the chances if the USDA gets ours folder by next week we will have money for our schedules closing May27th?

Mike D

May 7, 2010, 9:36pm (report abuse)

Good question. All accounts say that the funding is burning at about $100 million a day...with a 24-48 hour turnaround time, you are cutting it awfully close...it's possible, though...anything's possible with a government loan!

kenny h

May 8, 2010, 1:09am (report abuse)

We are in Louisiana. Our LO sent USDA our file Thursday morning, May 6, first thing. Do you think we will be o.k. based on current projections?

Clay B

May 8, 2010, 4:49pm (report abuse)

I have been originating USDA Rural Housing loans for 14 years and I have to say it is the best program available for low to mid income families. With the economy the way it is I can not see the gov't not passing H.R. 5017. It has passed the House now it is up to the Senate. Personally I expect it to be done in the next couple weeks. I wish the politicians and media would stop using 100% financing and sub-prime as they are the same. They are not. Sub-prime was for those that were not credit worthy to get any other loan. The USDA program is and always was for those that are credit worthy, that due to income constraints can not save for the downpayment but can afford the payment. It is a great program.

Clay B

May 8, 2010, 4:51pm (report abuse)

Here in upstate NY, USDA is at a 48 hour turn time. If that is true in Louisiana I would think you are okay.


May 10, 2010, 1:30pm (report abuse)

The turn time in Maryland is about 3-4 weeks. I'm waiting on one submitted to agency on 4/20. The changes proposed by the bill will be expensive, but not as expensive as losing the program. I'm glad they dropped the annual fee, a larger upfront still keeps the payment more affordable.

The financial crisis ias not due to 100% loans in general, but many of the sub-prime loans were 100%, so the public perception is that the 100%'s were the problem. Another huge issue is all the op-tion ARMS that were done. The layering of risk, 100% LTV, low credit scores, no reserves, and rates & payments changing after 2 years, were a recipe for disaster. The RD program has only 1 of those risk factors, and at least 2 forms of underwriting on each loan.


May 10, 2010, 2:03pm (report abuse)

im in CT. i took 3 weeks for mine to get through.


May 10, 2010, 2:05pm (report abuse)

I was just wondering if there are any updates on when this is going to be voted on in the Senate? Our application will probably go to the USDA at the end of the week and we are scheduled to close on 5/28. Anyone know the odds we'll be OK? Our Realtors for some reason don't seem too worried.

Clay B

May 10, 2010, 5:20pm (report abuse)

It was not the "100% loan" that was the problem. It was the fact that some 100% loans were given to people that shouldnt have had loans in the first place.

Clay B

May 10, 2010, 5:23pm (report abuse)

When H.R. 5017 went to the Senate it was given Senate Bill # S.3266. On 4/27/2010 it was referred to the committee on Banking, Housing, and Urban Affairs. If they give their blessing then it will go to a Senate vote.

Mike D

May 10, 2010, 9:17pm (report abuse)

Just got our loan today. It's a 24-48 hour turnaround here in NH.

carrie J

May 11, 2010, 10:54am (report abuse)

I Am located in upstate New york. My loan was submitted to USDA on 4-26-10 and I have yet to hear a response. I called my Loan officer today and he said that USDA was waiting to get funding back and my approval will probably be after funding is back in place.


May 11, 2010, 11:01am (report abuse)

Consumers are struggling to survive and recover from this recession. Now is not the time to increase rates. If America has millions to send to aid other countries, then there should be enough to sustain programs such as these for U.S. tax payers!


May 11, 2010, 1:25pm (report abuse)

I just spoke with someone at USDA and they said they are expecting to run out of money by the end of today or tomorrow.


May 11, 2010, 1:30pm (report abuse)

Can anyone else confirm this?

Gail P - Roanoke

May 11, 2010, 2:22pm (report abuse)

By my calculations from the total amount available nationwide on 5/7, funds will run out tomorrow.


May 11, 2010, 5:36pm (report abuse)

I am in the process of buying a house. Our closing date was set for may 28th.My lender now tells me that usda is out of funding and they are waiting on the new bill to pass.What are the chances that is we extend the contract to june 28th that funding will be ready by then?


May 12, 2010, 4:27pm (report abuse)

Make your voice heard if this is truly an issue you care about. Ask the US Senate Committee on Banking, Housing, and Urban Affairs to move HR 5017 quickly to the Senate floor for a vote here: http://banking.senate.gov/public/index.cfm?FuseAction=Contact.ContactForm


May 13, 2010, 1:06pm (report abuse)

Do all lenders who do these USDA loans provide the same rates? If not is 5.375% a good rate for someone with great credit?


May 13, 2010, 1:33pm (report abuse)

Deebert. Not sure but that's the same rate I got.


May 13, 2010, 4:26pm (report abuse)

Deebert the rate we were offered a week ago for the USDA loan is 4.875%. Perhaps it varies.

terry f

May 13, 2010, 5:18pm (report abuse)

This program has stable foreclosure ratios because of credit score requirements in place, the old FHA program that got in such trouble was more to do with no minimum score requirement then it had to do with 0 down.

Even the FHA product will perform much better now because credit requirements are much higher now.

carrie j

May 13, 2010, 5:59pm (report abuse)

Great news.. Just got a call from my loan officer my loan was finally approved by the USDA today. Finally getting somewhere after 3 weeks of waiting.. Good luck to you All.


May 13, 2010, 11:01pm (report abuse)

Still hope for everybody... I also got USDA approval today in NC for my loan. Apparently some funds still availabale, at least in NC


May 14, 2010, 11:57am (report abuse)

Here in Georgia, I was told the USDA ran out of money for the guaranteed loan. Now we're just waiting for the senate to pass the bill. Maybe they will hurry up since we're now down to wire (beyond that really).


May 14, 2010, 12:16pm (report abuse)


I am really happy for you!!! We in NC have been waiting for some 3 weeks.


May 14, 2010, 2:56pm (report abuse)

I just spoke to my lender. Tennessee is officially out of funds and they aren't processing any applications received after May 7.


May 14, 2010, 5:54pm (report abuse)

Does anyone have any news? I got an email from the USDA on Wednesday saying they will update me in 24-48 hours. Here it is 54 hours later with no update. It's so hard to wait!


May 14, 2010, 7:55pm (report abuse)

My lender submitted the loan package to USDA two weeks ago and he was told the "USDA had a hold on loan until today" now I cannot get a hold of my lender...help???


May 14, 2010, 9:02pm (report abuse)

It feels like a tease. The US Senate seems to be holding up almost everything this year. Now my loan is in jeopardy. Why are there so many mixed responses for simple questions? Is there money? Will we get the loans approved? Will extension funding be approved so the thousands of us can get into a home and add to the tax dollars. MY county taxes will be over $2400, sorely needed by my county agencies. My lender is trying to scurry me to FHA at this time, probably because of the higher fees they may need to pay. And then my loan will go up $100 for PMI. What about us who also gave notice to our landlords? Where do we move to now? I am trying to hold out so that I don't have to find the $6000 additional to close. I am also at the mercy now of the seller and if he would agree to extend my contract for another 15 days. If I don't close I will be losing out on appraisal fees, inspection fees and a few others. Not fair US Senate. I will pay back with voting you guys out of office.


May 15, 2010, 7:50am (report abuse)

After over 6 months since submitting an offer to purchase a short sale from a family of 4 having a very difficult time, Bank of America accepted our offer. BUT instead of helping this family and building our future, I watch as the Senate just sits on a bill for WEEKS (Rural Housing Preservation and Stabilization Act H.R. 5017)as the people they represent watch their dream slide by. NO SENSE OF URGENCY FOR THEM! Consider this, we have thousands of employees processing upwards of 4000 USDA applications per month that are now sitting on their hands. As stated by a USDA employee. LITTLE TO NO mortgage companies or lenders are processing USDA. No money available and no clarity on exactly what the new criteria might be. AND most importantly, where is the press coverage on this one??? Not a peep since the house passed this bill. I suggest that each of you reach out to your local and national media and ask why this HUGE story has received little to no exposure. I have and hope you do as well.


May 17, 2010, 11:10am (report abuse)

I know this bill will pass. Heck we live in America! I've been kicked out of 2 foreclosure rental homes in the past year; having no knowledge that the homes were in foreclosure. I work hard & always have paid my rent on time & need this loan for a home of my own.

Nervous First Time Home Buyer

May 17, 2010, 1:01pm (report abuse)

Congress please pass this bill now! I have had a house under contract for over 3 months (short sale) just got approval last Friday. I have to close prior to 6/30 to get the First Time Home buyers tax credit. Every day you do not pass the bill thousands of people are threatened with the chance they will not be able to own a home and forclosures will continue to rise.

Need this loan deperately

May 17, 2010, 4:27pm (report abuse)

I have recently sold my home, I have a small child and one on the way. I can go FHA if absolutly necessary, but I would have to come up with $3000.00 dollars. I really need that extra money for up coming expenses. Please Senate pass this bill


May 17, 2010, 4:44pm (report abuse)

We gave our landlord notice in hopes of getting into our home by the end of May. We don't know where we'll live if we aren't able to close on the house! We can't afford to go with another loan type because our rent has been too high to save up for a downpayment. Please vote on this ASAP, so many families are counting on this. I see less pressing bills being voted on in the Senate! http://democrats.senate.gov/calendar/2010-05.html Please vote on this bill ASAP!

Homeless In 2 Weeks

May 17, 2010, 6:43pm (report abuse)

Well, even though I have a good feeling that this bill will become law. I, like each one of you haven't the slightest Idea when this will happen. So here I am checking for any updates that I can find to help ease the pain of not knowing whether or not myself and my fiancee will be homeless at the end of this month. I guess my S.U.V will provide good shelter for us. Please Pass This Bill!!! Thanks

Ghislaine and Chris

May 17, 2010, 6:52pm (report abuse)

we are in the exact same situation as 'Nervous first time home buyer' we started building this house with the idea to be able to di this without money down AND getting the 8000 tax credit.......we are so afraid we will end up with nothing at all!


May 17, 2010, 6:54pm (report abuse)

I too just found out today that our loan is on hold till this thing pases. I know the seller of the house we are soposed to buy already put a deposit on a rental to move into. I was told that it should be voted on in the next day or 2, any truth to this? or just blowing more smoke?


May 17, 2010, 7:21pm (report abuse)

Kimberly - who told you this will be voted on in a day or two? Just curious. I'm looking for all the good news I can get.

We need this to pass, desperately. We can't afford to have our closing delayed. It would be even worse if they don't pass this by June 30th for the $8000 tax credit. I'd imagine a lot of people will be very unhappy if it doesn't pass by then.

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