Calera and Chelsea to Lose USDA Loan Coverage
If you’re thinking of buying a home in Shelby County’s Calera or Chelsea area and are planning on financing your purchase with a no-down-payment USDA loan, you better get moving with your purchase, because time may be about to run out.
As of October first, the USDA is expected to update the areas that qualify for its loans. For Shelby Co., this means that Calera—which has long been a popular spot for home Buyers using USDA financing—will be dropped from the eligibility list. Chelsea is also set to be dropped.
In Walker Co., Jasper will be dropped from USDA loan eligibility, as will Moody and Pell City in St. Clair Co., and Pleasant Grove in Jefferson Co.
In all, more than 90 communities will be removed from the list of qualifying areas.
The change in qualifying areas is not a 100% sure thing. At least one U.S. Congressman—Republican Jeff Fortenberry of Nebraska—is pushing to get Congress to order a one year extension of USDA’s existing eligibility zones. Others pushing USDA to grant an extension include the National Association of Realtors, the National Association of Home Builders and the Mortgage Bankers Association.
Why does USDA plan to change the zones? The answer lies partly with the 2010 Census. An existing grandfathering clause allowed any community considered ‘rural’ in 1990 to continue to be eligible for USDA funding until the 2010 Census, as long as it has a population below 25,000 and met other critera. That clause, which was first enacted in 1990 and extended in 2000, is now set to expire.
So, unless Congress takes action, many communities that currently qualify for USDA financing will lose their eligibility—and for many of those areas, USDA loans are the only source of federal housing funding.
Posted on August 13, 2012, in Real Estate and tagged agent, birmingham, calera, chelsea, colleen black, columbiana, david black, Economy, first time buyer, for sale, home for sale, home sales, housing, keller williams, keller williams realty metro south, mortgage, Real Estate, shelby county, usda, usda loans. Bookmark the permalink. 2 Comments.