Lenders that are originating SBA 504 loans (both in the construction/acquisition and refinance program) purely for pooling the first mortgage loan for sale in the secondary market are beginning to shut down those operations in anticipation of the expiration of the program on September 23, 2012. Since SBA 504 loans cannot be pooled until 504 debenture funding, the last opportunity to pool loans will be the September 12, 2012 debenture funding date, and even that date is cutting it awfully close to the program expiration date. Realistically, lenders are looking at the August 15th debenture funding date as the last opportunity for closed 504 first mortgage loans to be pooled and sold. To make the August 15th date, all documents need to be with Colson by July 24th, and given a 60-day period to efficiently close an SBA 504 loan, that would imply any application taken after May 24th is not likely to make the cut-off for pooling and sale in the secondary by the end of the program.
“When we sat down and looked at the timeline, we decided to effectively cut off applications of 504 loans originated for pooling and sale in the secondary market as of June 1, 2012,” said Tim Moffett, Vice President and head of Government Guaranteed Lending at Country Bank. “However, we like the SBA 504 program and will continue to originate 504 loans for the bank’s balance sheet.”