The Rural Housing Service is telling lenders that in mid-September it will begin processing and guaranteeing loans that were originated with conditional commitments once it completes an "interim enhancement to its electronic systems."
The RHS must update its software systems to accommodate a new premium structure passed by Congress in late July.
The agency insured about $13 billion in rural residential loans until it ran out of loan commitment authority in May, several months shy of the end to its fiscal year.
"When the interim enhancement is complete, Rural Development will process all Conditional Commitments issued after May 26, 2010, that had the proviso 'subject to availability of funds,'" RHS administrator Tammye Trevino says in a letter to lenders.
Congress recently authorized enough RHS loan guarantees to meet demand through Sept. 30 — when the 2010 fiscal year ends.
RHS expects to complete all system upgrades for the new premium structure "as early as possible in the next fiscal year," the agency told lenders.
