What’s the USDA Doing in the Housing Market?
Government thinks it can be all things for all people, making us beholden to their whims.
Check it out:
CALLER: I’m calling in about the housing market. I’m a RE/MAX owner in the Pendleton area in Indiana. Over the past five years as we watched our community lose their jobs and their homes during the recession, we are now seeing a small improvement in the housing market and now the USDA is shut down and 20 to 25% of our loans in our area are using this USDA program. So we have buyers who cannot close on their houses and sellers who are walking away from them.
RUSH: And you attribute that to what?
CALLER: Well, right now the USDA is such a loan program, it’s a no-money-down government program for rural areas and about 20, 25% —
RUSH: Wait a minute. Wait just a second. You’re saying USDA?
CALLER: USDA. It’s a rural development loan. So the government, again, has gotten involved in the mortgage business. (chuckle) So now that they’re involved, it’s a no-money-down, families up to about a $73,000 a year income, with a combined income of about $73,000 a year can qualify for a no-money-down loan that allows them to purchase a home in these rural areas, which my area qualifies for. It’s a 100% financing, and it’s a fixed rate, and it’s a conventional loan product.
RUSH: So you’re saying that the government shutdown is killing you? Is that your point?
CALLER: I’m saying that we have many, many loans. We’ve got about 25 to 30% of our personal loans are USDA, and the USDA takes about 30 to 45 days to approve these loans and so now these loans are stopped and our sellers are walking away from the transactions because they don’t want to wait on the USDA to open and they’re looking for a new buyer.