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Earlier this week, the US House of Representatives passed the Rural Housing Preservation and Stabilization Act of 2010 (HR 5017). Through this legislation, the guarantee fee in the USDA Guaranteed Rural Housing (GRH) Program may be raised to offset any need for Congressional Appropriations (Currently we believe to 3.5%). Additionally, HR 5017 would authorize USDA Rural Development to guarantee up to $30 billion in loans in Fiscal 2010. This would represent an $18 billion in loan making authority for the remainder of the fiscal year. Before these changes can be implemented, similar legislative action will need to occur in the US Senate. Following the action in the House, the USDA Rural Development National Office sent an announcement that stated “Depending on Congressional activity with the proposed legislation it is possible that the Agency may consider issuing additional commitments.” We're getting closer!

Yesterday, the Kanjorski bill (HR 5017) passed unanimously in the House Financial Services Committee and we anticipate that it will be voted on by the Full House of Representatives early next week. HR 5017 is a bill aimed at supporting the rural housing market that has struggled to get passed. Also known as the Rural Housing Preservation and Stabilization Act of 2010, it will end the current method of using federal funding to backstop the guarantee and instead will fund the program through mandatory fees. HR 5017 ensures rural homebuyers access to affordable loans through USDA, but because these loans have tripled since 2006, federal funding will be running out literally in the next few days, making passage critical. Rep. Barney Frank, who is a big supporter of the program, expressed his concern that the program was going to run out of funding by the end of the month, and said that he was going to do everything possible to expedite the bill so that would not happen. In order to pay for