As in previous years, the United States Department of Agriculture (“USDA”) has recently posted a bulletin announcing that under the Single-Family Housing Guaranteed Loan Program, there will be a short period of time during the new fiscal year – approximately two weeks – when funding is not available. USDA’s fiscal year 2022 begins on October 1, 2021 and ends on September 30, 2022.
During the period of time when funding is unavailable, Program Directors have no commitment authority. Completed guaranteed loan applications will still be accepted from approved lenders for purchase and refinance loans. Eligible loans will be issued Conditional Commitments “subject to the availability of commitment authority.”
Conditional commitments must contain specific language related to funding as lenders assume all the loss default risk until funds become available and the USDA is able to obligate the loan and process a Loan Note Guarantee.
DocMagic will update the Conditional Commitment for Single-Family Housing Loan Guarantee (Form ID: RD355518.RH) to include an attachment with the required language until the USDA announces that funding is available for the new fiscal year.
Additionally, the bulletin advises that the upfront guarantee fee for FY 2022 will remain at 1.00% and the annual fee will remain at 0.35%.
If you have any questions about the information in this article, please see the USDA’s announcement here, or contact DocMagic’s Compliance Department.
