Changes could soon be coming to a home loan program that's popular in South Jersey and throughout much of the state. Many are wondering what will happen with the USDA mortgage program, and some experts believe changes could have a big impact on the local market.
"I love E.H.T., my children go to school here." And that's why Lisa Derbyshire wants to buy her first home in Egg Harbor Township, and is hoping to use a USDA loan to make it happen. "When you don't have a whole lot of money to use to buy a home, there's nothing much left we can do."
"It's a popular program and we use it quite a bit." As one of the only mortgage programs that requires no money down and offers 100% financing, USDA loans are a popular choice for many in areas that offer them, like Egg Harbor Township, but those areas could soon change. "In a nutshell, they're going to re-evaluate the census," explained Patrick Delaney, Regional Vice President for Sun Bank Home Loans, "and the potential is there to flash forward to the 2010 census, which would knock out an awful lot of Atlantic County, Gloucester County, Cumberland, Salem."
It all comes down to what's considered rural by the USDA, and that's what could be changing as of March 27th. It's something that both lenders and buyers are anxiously waiting to learn. "It scares me, quite frankly," said Derbyshire, "because that means we're going to have to stay another year where we're at, try to save up more money, and then what happens then? The interest rates go up? Everything changes."
"It really could impact the area quite a bit," said Delaney.
Congressman Frank LoBiondo (R, 2nd District) says he recognizes how important the program is for South Jersey and the rest of the state, and says when it was in danger of changing years ago, lawmakers were able to help keep it going. "We're hoping to be able to do that through legislation for the long term," said the Congressman while in Washington, D.C., "in the short term, we're hoping to fix it this week with what is called a Continuing Resolution, which will keep the government running between April 1st and September 30th, and also give the authorization language which would allow the USDA to continue with this program."
But for potential home buyers like Lisa Derbyshire, all they can do is wait. "And pray," she said, "pray that everything stays the same."
Congressman LoBiondo says we should know by the end of the week if the Continuing Resolution passes, and what exactly that may mean for the USDA program.