| USDA Rural Development increases in the Guarantee Fee for Refinance Transactions. (Effective 12-7-11) — USDA Upfront Funding Fee December 2011
I\'m sure this was a big surprise to everyone; however I understand that with this increase it will allow the agency to make available over $1.1 billion in refinance commitment authority to eligible homeowners.
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| USDA Sneaks In “Authorized User Accounts” Underwriting Rule to GUS — November 2011
If you haven’t noticed, GUS has added an underwriting rule regarding “Authorized User Accounts,” and we wanted to tell you about it because you can’t find it in the guides.
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| New USDA FAQ (9-7-11): Implementation of Annual Fee (Effective October 1, 2011) — September 2011
I have no doubt that you’re going to see total chaos occur in the next few weeks as lenders who have submitted loans to USDA (both timely and late) who failed to get their loans “obligated” before October 1st will have their loans kicked back to them for re-disclosure.
(USDA Updated FAQ, dated 9/7/2011)
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| USDA RD Updates Indemnification Policy & Revises Maximum Allowed Interest Rate – Federal Register [76 FR 31217] (Effective 8-1-11) — September 2011
USDA RD is simply eliminating the lender’s published VA rate for first mortgage loans with no discount points as an option for setting the maximum interest rate on loans. And, with the “identification policy,” we fully expect USDA RD to utilize their new enforcement and indemnification powers to both terminate negligent lenders and seek indemnification for any losses suffered by the Agency.
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| USDA RD Clarifies the Definition of “Unable to Obtain Conventional Credit”. AN 4594. [Download Mortgage Talking PointsTM flyer, USDA Loans and the Meaning of Conventional Credit - Who Qualifies?]
— USDA Conventional Credit September 2011
Why is this USDA Announcement such a big deal? Because many borrowers have been denied loans over the years by both RD state and field-level offices. Bottom Line: If a borrower is able to secure “conventional credit” under reasonable terms and can meet the requirements of a “traditional conventional credit” loan, then they are NOT eligible for a USDA RD Guaranteed loan.
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| USDA RD Guarantee Fee change to go into effect October 1st, 2011 [Download Charts/Checklists: USDA Guarantee Upfront & Annual Fee Calculator Forms] — August 2011
Check your USDA files now. The October 1 implementation date is based on the date that USDA Rural Development obligates the loan. It is not based on the date that the lender receives a borrower application or when the loan is submitted to RD. RD obligates a GRH loan after receiving and approving a complete application package submitted by the Approved Lender.
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| USDA - Outbuildings and income producing properties – AN 4590. [Download Mortgage Talking Points™ flyer, USDA Explains What's an Acceptable Outbuilding] — USDA Outbuildings August 2011
Finally, RD appears to be giving us the “common sense” latitude to recognize the difference between an acceptable “related facility” and “farm service building”.. If you offer USDA loans, get the word out to your real estate agents and have the check with you prior to listing a home with outbuildings to make sure the property is eligible.
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| USDA RD Revised Income Limits for Guaranteed Housing Loans (Effective July 1, 2011) — USDA Income Limits July 2011
Generally speaking, it appears that most of the limits remain unchanged with small increases in select counties across United States. But it\'s important to note that a household\'s total income can potentially be much higher than the published adjusted income limits due to certain allowed adjustments to income that potentially could bring a household into income eligibility guidelines.
(Revised income limits - eligibility.sc.egov.usda.gov)
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| USDA RD offers Loan Origination and Submission Documentation Guides - AN 4575 [Download Charts/Checklists, USDA Worksheet For Documenting Annual & Repayment Income and USDA Lender’s Origination Submission Checklist (Fillable Forms)] — USDA AN 4575 July 2011
Lenders and USDA field staff should both welcome these very helpful guides. I\'ve seen USDA RD issue a number of guides and checklists over the years. I know national lenders were frustrated with the inconsistency and by the sloppiness of documentation submitted by the lenders. I consider these 2 charts/checklists to be some of the most concise, educational and useful documents they\'ve released to date.
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| USDA RD changes how maximum interest rate is determined on Guaranteed Housing Loans (Effective August 1, 2011) — June 2011
Under new guidelines USDA Rural Development eliminates the Lender’s published VA rate for first mortgage loans with no discount points option in determining a maximum interest rate on 502 Guaranteed Housing loans. Now all lenders must use the current Fannie Mae rate in determining the rate ceiling.
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| USDA - New Thermal Standards for New Construction, Guaranteed Housing Loans - AN 4519 [Download Charts/Checklists: USDA Thermal Requirements For New Construction & Manufactured Homes – Attachment A & B]
— New Thermal Requirements for USDA April 2011
This one almost got by us and frankly what I’m about to tell you very few lenders are aware of… in fact many USDA RD field offices are not aware of it either. AN 4519 specifically addresses new thermal requirements for not only manufactured housing but new construction “stick built” and “modular homes” as well.
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| USDA Refinancing Single Family Housing Loans – Annc. 4549 - [Download Charts/Checklist: USDA Refinance Rural Development Matrix - Streamline/Non-Streamline]
— March 2011
First of all, before you get too excited, USDA RD ONLY allows the refinancing of “existing agency loans”, both the 502 Guarantee and Direct loans(1). You cannot refinance existing FHA, VA or Conventional loans into a new RD Guaranteed Loan. No appraisal is required for a “streamline “ refinance because an RD refinance transaction is for all practical purposes a full documentation loan now.
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| USDA Guaranteed Housing Add Annual Fee and Decreases Upfront Fee (Effective October 1, 2011) AN 4511 – 2-03-11 [Download Charts/Checklist - USDA Annual Fee Calculation Chart]
— March 2011
Now, the fact the RD annual fee will add to a borrower’s monthly housing expense is not welcome news but it gets worse when one considers that the annual fee is for the life of the loan and simply does not go away. [Download Charts/Checklist: USDA Annual Fee Calculation Chart]
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| USDA New Form 1980-21 “Request for Single Family Housing Guarantee” (Effective December 5, 2010). [Download Charts/Checklists: Form RD 1980-21 - Job Aid] — December 2010
All Uniform Residential Loan Applications (Fannie Mae Form 1003/Freddie Mac Form 65) dated on or after December 5, 2010 will require the use of the newly published [Form RD 1980-21 - Job Aid (Download)]
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| USDA Major Changes and Clarifications with the Release of USDA Rural Development’s AN 4543 – Effective December 5, 2010 - [Download Charts/Checklist, Underwriting and Loan Closing Documentation Matrix & Mortgage Talking Points™ flyer, Quick Guide To USDA Development Loans]
— Mortgage Talking Points flyer USDA December 2010
Wow! This is a MUST READ document if you are doing USDA Rural Development Guaranteed Housing loans. It’s 32-pages of updates but we’ve highlighted 14 Changes you need to know about right now. USDA Rural Development packed a lot of changes into their new AN4543. [Download Underwriting and Loan Closing Documentation Matrix & Mortgage Talking Points™ flyer, Quick Guide To USDA Development Loans.]
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| USDA Rural Development FY 2011 Funding – Great News and a BIG Surprise (Effective 11-1-2010) [Download Mortgage Talking Points™ flyer, Quick Guide to Rural Housing Loans (updated)]
— Mortgage Talking Points flyer Quick Guide to Rural Housing Loans November 2010
RD had previously announced that the Guarantee Fee for refinance transactions was going to be 2.25% yet surprisingly it was revised to a fee of only a 1%. A huge drop! While great news, it took everyone by surprise including the State RD offices. As one State RD official stated…”it’s just as big a surprise to us as it is to you.”
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| USDA Rural Development FY 2011 Funding Notice (Effective October 1, 2010) — USDA Good News Bad News October 2010
USDA Funding for 2011 - the good news, bad news saga continues. For those who don’t understand that this “subject to funding” language is really nothing new, the USDA stated they will “temporarily suspend” the loan program until they can get their “warm and fuzzy” feeling the government is fully behind them.
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| USDA Rural Development's Guaranteed Housing Loan Program; The Good and Bad News [Effective Sept. 8, 2010] — USDA Funds are Available September 2010
You can almost hear the sigh of relief that funding is now available. However, there’s a catch! RD will fund all complete applications received until September 30, 2010 but the one question that no one seems to be able to provide a clear answer to is what happens after the current fiscal year is over. The new fiscal year begins October 1, 2010.
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| USDA Funding/Fees Updated for Guaranteed Rural Housing Program — August 2010
Still a lot to be ironed out here and it may be 4-6 weeks before we get all the details. The final guarantee fee amounts have not been officially announced. It is anticipated they will continued to be the amount as stated from previous guidance issued to the RD field office.
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| Updated 2010 Income Limits for the USDA Guaranteed Rural Housing Program (Eff. June 2, 2010) [Download Mortgage Talking PointsTM flyer, Six Common Deductions Allowed By USDA PLUS EXTRA BONUS: Income Eligibility Calculation Worksheet] — USDA Good News Effective 6210 June 2010
For “non-high cost counties”, the limits for households have increased $600. While not a big increase, it’s always nice to see an increase in income limits. Just remember, this is based upon “adjusted gross” and USDA allows deducts from the gross to qualify. Mortgage Talking PointsTM flyer, Six Common Deductions Allowed By USDA PLUS EXTRA BONUS: Income Eligibility Calculation Worksheet
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| USDA – SFH Underwriting and Loan Closing Reminders – April 7, 2010 [Link to Updated Forms] — April 2010
RD is providing additional clarification on “cash back” to borrower to hopefully minimize confusion on lenders part. A borrower is allowed to receive in “cash-back” at closing no more than that amount “documented”...period! Pro-rated property tax credits can still be applied as a credit to the borrower but it cannot result in more cash-back either. Also covered—reminder to use updated closing forms. [Link to USDA Forms Page]
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| USDA Underwriting and Loan Closing Reminders: Multiple Subjects (January 20, 2010) RD Instructions — February 2010
USDA has clarified some issues that have come up within the last several months. If you do Single Family Housing Guaranteed Loans, there are some subtle updates covering: Cash Back to Borrower At Closing; Grossing Up Non-Taxable Income; Short Sales; and intent to purchase a home!
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| USDA Announces 2 Pools of Funds for Refi’s — December 2009
Rural Development has provided us with a tremendous loan product and opportunity to assist your borrowers with our ability to refinance existing agency loans. By simply obtaining a new appraisal and fully documenting the file you can loan up to the appraised value plus the guarantee fee. Additionally the guarantee fee for refinance transactions is only .5% as opposed to the 2% guarantee fee for purchase transactions. Place an ad in your local newspaper to attract these leads!
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| USDA Flood Zone Waiver Authority Eliminated (Effective Immediately) — November 2009
This is a big deal for properties located in the 100-year flood zone. Gone is the ability for stats that had blanket waivers—to waive the requirements! If you have any of these loans in your pipeline, review it now.
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| USDA Clarifies Medical Deductions & Annual Income Calculations — October 2009
What triggered the notice was the fact that someone started a rumor—with RD offices receiving numerous calls and e-mails from lenders who had been told that they could deduct the pre-tax insurance premiums that employees were paying out of their gross annual wages. This false rumor began spreading across the United States and RD felt they had to send out a policy clarification.
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| USDA Provides Guidance on New versus Existing Homes – (Includes AN 4414 and AN 4364 Administrative Notices.) — August 2009
Evidently, mortgage companies and loan officers new to USDA housing don’t know the difference between a new and existing home. Okay, so it’s always good to remind people of the difference, but the real purpose of the memo was to bring to your attention, 2 references that make a great “refresher” for you to review.
(SFH Origination News - New Construction/Existing Construction - July 22, 2009)
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| USDA Requires Appraisal Form 1004MC (Effective July 1, 2009) — July 2009
It was going to be a matter of time before USDA joined in on the fun. What’s NOT mentioned is how USDA will “adjust” the value and loan amount, based upon the 1004MC. But, you have a small window of opportunity here.
(USDA - Single Family Housing Origination News - June 26, 2009)
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| USDA Now Allows In-Ground Swimming Pools - But May Reduce Loan Amount (Effective May 28, 2009) — July 2009
In-Grounds Pools Now Allowed – But, ask your local USDA about ARRA funds! What you don’t want to have happen is that you “think” the swimming pool issue is okay, then find out the ARRA money is being used to fund the loan—it’s an automatic reject!
(USDA RD AN 4442 - May 28, 2009)
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| Expect U/W Delays - USDA Single Family Housing Guarantee Loan Program — June 2009
Could be weeks in underwriting! Warn your clients and real estate agents. Check closing dates. Get those contracts extended.
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| USDA Increases Income Limits for SFHGLP. — May 2009
Before you tell your first time homebuyers that “FHA is the way to go”, new income limits could make this the first option you recommend. Yeah, the property location is important, but you’d be surprised what areas qualify for Single Family USDA loans!
(Rural Development - Single Family Housing Guarantee Program Letter - April 17, 2009)
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| USDA Rural Development Single Family Housing Funds Available - Mortgage Talking PointsTM "Quick Reference Guide to USDA Loans" (Effective March 20, 2009) — April 2009
$10 Billion (yes, that\'s billion with a B). The USDA has already used 25% for "purchase transactions" that have been on HOLD since 1/9/2009. When the "dust" settles, money will be released for refis. Not every community qualifies - but if yours does, it\'s the best thing since sliced bread! Links to check counties PLUS Mortgage Talking PointsTM "Quick Reference Guide to USDA Loans".
(USDA Letter "Single Family Housing Guaranteed Loan Program Available Program Funds", March 20, 2009)
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