Effective October 1, 2013, USDA is going to adjust the boundaries for the rural development program. This will affect many areas around the Minneapolis/St Paul area. A year ago, USDA decided to delay the implementation of the 2010 census tracts. That allowed cities such as Northfield and North Branch to continue to be eligible for USDA programs. That delay is coming to an end – unless Congress decides to extend it.
If you have been looking in areas just outside the cities, you may want to check with your loan officer or check on the USDA website to see if your area is still eligible. For example, Faribault and Northfield are no longer eligible areas as of October 1, 2013. North Branch will also no longer be eligible. There is a website that you can check future eligible areas within the USDA program, http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do.
If the program won't work moving forward, your options will be FHA or conventional financing. Talk to your lender about your options to see which program may work better for you. FHA only requires 3.5% down, but the mortgage insurance is high. Conventional loans require a minimum of 3%, as of Nov 16th it will be 5% down. If you have the ability to put 5% down and your credit is good, you may want to look at a conventional mortgage.
For those that need the USDA rural development program, you may need to adjust the area you are looking in. Elko New Market will still work even though Northfield won't! Check the map and decide what areas will still work for you! If you have a purchase agreement already, you may want to make sure the property is still eligible. Currently USDA is about two weeks out on their loan approvals, so you may be running out of time if you need to close this month.
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants – Email – Website
