USDA official release can be found below:

This message is to notify you that program funding for the Single Family Housing Guaranteed Loan Program will likely be exhausted by the end of April, 2010.

Once funding is exhausted, the Agency will not issue Conditional Commitments “subject to receipt of appropriated funds.”  This is because it is not certain when additional funding will be available.

Limited funding may become available for disaster areas declared in 2008, or in disaster areas declared for Hurricanes Katrina and Rita.  Limited funding may also become available as prior Agency commitments are de-obligated, however, such funding will be very limited.

We apologize for any inconvenience this may cause you.  Should you have any questions, you may contact the Single Family Housing Guaranteed Loan Division at (202)720-1452.

—– End Release

Technically speaking USDA runs out of money every year and this usually doesn’t affect anything. They just source the fund somewhere else in government. Last year USDA ran out of money too but the stimulus plan buffered that shortfall. Things are different this year because of the huge demand placed on the program.  It looks like the 502 guaranteed Rural Housing program will have exhausted their funds by April 2010!!! For this to not happen, the USDA would need to receive about 150 million in funds to be able to continue the rest of the fiscal year which runs September 2010.

We are just now finding out about this so what is a consumer to do? Or for that matter, my industry peers; Realtor, Loan Officer etc..? We need to contact our local government representation and get them working on a solution. If they don’t, I’m afraid many folks are going to be left up that certain creek without a paddle. You can look up your local representation here. Once at the site, just click your state.

Some lenders have already stopped taking USDA loan applications. If you are in the middle of a transaction, contact your Loan Professional or Realtor immediately and find out your status.