We received this notice late last week from USDA:
FY 2012 refinance funds are exhausted.
At this time, we are unable to process any GRH Refinance transactions. The applications currently awaiting review by Rural Development will be returned to the lender without action.
Refinance funding will be restored in October. The new fee structure will be 2% upfront and 0.4% annually. Because of the new fee structure, any refinance applications currently with RD will have to be re-underwritten, and resubmitted for review. Lenders may submit applications for refinance (at the new rate) at any time, however, RD will not review them until funding is restored.
Please note that funding for new applications is still available and will likely remain so through the fiscal year.
USDA offers zero down financing for residential purchases in designated rural areas to families under certain income levels.