I hope things work out and you're able to buy the property you're pursuing.
You technically are capable of obtaining an FHA loan or a 5% conventional loan with LPMI or BPMI so it's just going to come down to waiting and allowing the appeals process to take place and complete it's course. If you were my client I'd be trying to prepare you for the 'back up plan' as well.
In the meantime, does it jeopardize your contract? What happens IF or When your appeal is approved but the USDA RD loan program is out of funds for the year? Will your lender still fund your loan? Can they shelve it until Congress allocates funds for the 2013 program? What if Congress doesn't approve a budget?
I'd just hate to see your dream of home ownership become a nightmare when you can take advantage of today's low rates, the tax deduction that interest and mortgage insurance bring.
Also, your 20% reserves has now dwindled to 10%? What happened to $15k?
The reason I ask is that I originate RD loans all the time and generally speaking they are typically reserved for those who do not have the ability to obtain more conventional financing. While I understand you may not have 20 % down any longer why don't you consider using an FHA loan as opposed to waiting for a governmental department to review your appeal?
I would think an appeal could take a lot longer. Did they even say how long the appeal process would be?