The government shutdown now shutting down some folks dreams of owning a home. The latest shutdown has shuttered the agency responsible for one of America’s most popular rural home loans, and its putting realtors, bankers, and prospective home buyers in a tough place. The USDA rural living loans were a win–win situation, the USDA administers the loans for no down payment and low interest rates, making them available for lower income families.
In exchange this made rural towns a more appealing destination for home buyers, helping stimulate rural economies.Speaking to realtor Patrick Slack of 21st Century Midlands in Kearney, the overwhelming amount of homes he sells in rural communities utilize these rural living loans.
“I would tell you probably 9 out of every 10 deals I do outside of Kearney have rural financing involved. The rural communities have seen a spur in sales because of that, you can get more house for the money and that’s where rural development has really helped us in those sales,” said Slack.
But now bankers and realtors can’t apply or advance any new rural living loans as the office have been shuttered from the latest government shutdown.
“There is no one, their department is shut down so when we submit those loans the USDA rural development staff have reviewers that have to approve those guarantees and issue loan note guarantees for us to be able to close the loans and with that department shut down we cannot submit those loans for a guarantee,” said Lori Leonard, loan mortgage officer for Exchange Bank in Kearney.
That uncertainty with the loans is translating into anxiety and frustration from prospective home owners. For Slack, he has spent a lot of the last three weeks trying to ease those fears in folks who are already going through the stressful process of buying a home.
“There is a lot of anxiety going on right now. Our discussions right now with clients and customers who are obtaining USDA rural development loans is having that secondary contingency plan. That would be either FHA program, which is another government related loan not affected by the shutdown and just other financing options that could be available,” said Slack.
Unfortunately for prospective home buyers trying to take advantage of the USDA rural living loan, there isn’t a whole lot they can do right now. They will just have to wait for the end of the government shutdown and hope for some compromise in Washington.
We want to hear more from you, if you are in the process of applying for a USDA rural living loan or have had your application delayed let us know on Facebook or Twitter and tell us your experience with applying during the shutdown.