Lender: More USDA Loans Could Be Done

Amid concern that industry funding and liquidity resources are scarce for first-time buyers, one lending executive is reminding market participants there is an overlooked resource available in areas outside of major metropolitan areas: USDA lending.

“We think the program has been undermarketed,” said Marla Greengrass, director and rural housing program manager for WCS Lending, citing shortfalls in its available funding power in recent years, notably in the past year the use of only $18 billion of $24 billion budgeted.

The product is advantageous to first-time and low-income homebuyers because it can allow under some circumstances 100% financing or relatively low downpayments and accommodate alternative credit histories and it performs well. But it can have varying closing times, depending on the state.

Greengrass said she believes among the reasons the product is overlooked is because it is considered a “rural product” when it actually is population-based and can be used in areas that might be thought of as more suburban than rural.

She said the time is now to market the product as the summer buying season is beginning and rates, while slightly higher, are still relatively low.