What happens after the lender closes the loan?

After the lender closes the loan, the process of submitting the loan package to the Rural Development (RD) for insuring takes place. This step is important because it ensures that the loan is backed by the USDA, thereby providing protection to the lender against default. The insuring process allows the lender to assure that the loan meets specific criteria and provides benefits like lower mortgage rates to the borrower.

This is a necessary step in fulfilling the requirements of the USDA Rural Housing Loan program, as it completes the formalities and guarantees that the loan aligns with the government-backed policy. Once the package is submitted for insuring, the loan can be considered a part of the USDA’s portfolio, solidifying its backing.

The other options reflect actions that may take place after a loan closes but are not the immediate next step in the process. For instance, while the loan does get funded in accordance with closing, the insuring step is critical before the funds can be utilized fully. Making the first payment occurs only after some time post-closing, and the imposition of additional fees is not necessarily a standard outcome of closing, as that would depend on the terms of the loan and other factors.