|USDA - SINGLE FAMILY HOUSING GUARANTEED LOAN PROGRAM: HB-1-3555 REVISIONS (Effective Date July 7, 2017)
USDA Clarifying Power of Attorney Requirements September 2017|
USDA is issuing updated requirements for a Power of Attorney because some lenders were misinterpreting the intent of the language. If you are working with the USDA program, you will want to read what has changed to prevent any issues with your guaranty requirements, and to ensure that you give your borrowers the correct information. (USDA - SINGLE FAMILY HOUSING GUARANTEED LOAN PROGRAM: HB-1-3555 REVISIONS Effective Date-July 7, 2017)
|USDA-Manufactured Housing Pilots Under Section 502-SFH-Direct and Guaranteed-Dated July 21-2017
USDA Manufactured Homes September 2017|
Those of you that offer USDA products or are considering offering these products need to read through this important update about the expansion of a pilot program. This update is specifically referring to Manufactured Homes, and announces 5 more states being added to the pilot, bringing the total to 13. Perhaps this creates an opportunity for you in your state. (USDA-Manufactured Housing Pilots Under Section 502-SFH-Direct and Guaranteed-Dated July 21-2017)
|USDA Rural Development Revises Property & Appraisal Requirements - Handbook HB-1-3555 – Effective 5-17-17
USDA Property Appraisal Requirements June 2017|
USDA Rural Development recently published revisions to portions of Handbook HB-1-3555 via Procedure Notices 498 (published 5/17/2017). We cannot begin to express how significant the revisions to Chapter 12 are. These 10 major revisions cleared up a number of issues impacting loan origination.
|USDA Rural Development revises portions of handbook HB-1-3555-Procedure Notices 494 & 495- Effective Immediately
USDA Caps the Maximum Homeowners Insurance Deductible April 2017|
USDA has made a few important updates to their Procedures Manual. Updated Chapter 6 “Loan Purpose” and Chapter 16, “Closing the Loan & Requesting the Guarantee”. Check out the new “deductible rule” for homeowner’s insurance. If you offer USDA financing, make sure you take a few moments to read these updates! (USDA Rural Development revises portions of handbook HB-1-3555-Procedure Notices 494 & 495- Effective Immediately)
|USDA Rural Development Rolls Out 28 Online Origination Training Modules
USDA Program Training March 2017|
Curious about offering USDA financing, or seeking to learn more? If so, this is an update you will not want to miss. Our USDA expert has provided the link to the entire USDA Online Training Modules that were just released. This training is exactly what you need to know in order to offer this product or to understand USDA more fully. (USDA Rural Development Rolls Out 28 Online Origination Training Modules)
|USDA Manufactured Housing Unit Financing Pilot-502 Single-Family Housing Direct and Guaranteed-Existing (Effective Immediately) [Mortgage Talking Points™, Quick Guide to USDA Rural Development Loans]
USDA Existing Manufactured Homes February 2017|
USDA is announcing a pilot program in 8 states to finance existing manufactured homes. Previously, only new manufactured housing units were acceptable. If you work with USDA and lend in any of the listed states, you will definitely want to know how this program works! (USDA 502 Single-Family Housing Direct and Guaranteed-Existing Manufactured Housing Unit Financing Pilot-Dated August 12-2016-(Effective Immediately)- Updated MTP™- Quick Guide to USDA Rural Development Loans)
|USDA RD Updates Income Limits for 2016 (Effective 6-15-2016) [Download USDA Income Limits Chart - Effective 6-15-2016]
USDA providers will want to read through this update carefully as there are several updates and resources that you will want to keep handy. It appears that most of the limits remain unchanged, with small increases in select counties across United States. The “floor amount” (the lowest income limit published) remained the same from 2015 at $75,650 for a 1-4 person household and $99,850 for a 5-8 person household.
|USDA - Upfront Guarantee Fee and Annual Fee Decreases Effective October 1, 2016
Upfront Guarantee Fee and Annual Fee Decreases May 2016|
This announcement came as a shocker. All I can say is WOW – this is a HUGE fee reduction. For fiscal year (FY) 2017, which begins October 1, 2016, homebuyers purchasing a home through the USDA will pay less for both the upfront guaranteed fee and the annual fee for the program. The reduced fee will be in effect from October 1, 2016 through September 30, 2017.
|USDA Rural Development Announces New Refinance Program - Dated May 3, 2016 (Effective Date - June 2, 2016)
USDA Streamline Refinance Assistance Program May 2016|
The USDA has made streamline refinances easier effective June 2, 2016 with an exciting new release! This is long overdue and great news for those of you that participate in the USDA program. We highly recommend that you read through this article and mine your customer database for those you can now assist! (USDA Rural Development Announces New Refinance Program - Dated May 3, 2016 - Effective Date - June 2, 2016)
|USDA Rural Development Update on Student Loans and Their Impact in the Total Debt Ratio [Download Updated Chart - Student Loan Chart/Checklist- FHA/VA/USDA/Conventional Comparison (updated 4-10-2016)]
USDA and Student Loan Debt April 2016|
USDA has clarified how they will count student loan debt in the debt ratios. Recent updates to the 3555 Handbook, which were intended to simplify guidance for the delivery of the guaranteed loan program, have caused some misperception with regard to total debt ratio calculations, specifically on the subject of student loans. The Agency is working on revisions to Chapter 11, Ratio Analysis; however, they wanted to further clarify the subject at this time.
|USDA Income and Property Eligibility Guide Released April 6, 2016
USDA has recently updated their site and their eligibility guide. If you or your staff originate USDA loans, you’ll want to make sure to review this article and the attached guide, and bookmark the new USDA site. (USDA Income and Property Eligibility Guide)
|USDA Rural Development Makes Significant Revisions to Handbook HB-1-3555 (Effective 3-9-2016)
USDA Loan Qualification Requirements March 2016|
If you do USDA loans this is a MUST READ! Big changes effective 3-9-16 that are substantial will require us to go through all of the USDA supplemental materials in detail, so please stay tuned for those updates. In the meantime, David Hail has provided us with the important and need-to-know changes and clarifications for Handbook HB-1-3555. We have also uploaded the entire handbook for your reference, along with all of the updated supplemental material, so be sure to check that out! NOTE: Since we will have to update quite a few Mortgage Talking Points™ and comparison charts, we will update them within the next 60 days and notify you which ones have been updated. (USDA Rural Development makes significant revisions to regulations Handbook HB-1-3555 )
|USDA Loan File Review Guide (Effective 1-9-2016) [Download Chart/Checklist, USDA Origination Stacking Order Checklist]
This job aid provides important need-to-know information that could have a significant impact on your loan files. It\'s a must read. Pay particular attention to the “Release files for lender correction” piece...there are 43 of these. The message is clear... get it right or we will release the file back to you, and you go back to the end of the line when you resubmit with corrections.
|USDA Rural Development Adds Security Role for Broker Access Capability (Effective 12-9-2015)
USDA Rural Development’s Guaranteed Underwriting System (GUS) just got a welcome upgrade. Non-approved third-party agents such as mortgage brokers and/or correspondent lenders can now access GUS via access made available through agency-approved lenders. This feature has never been available until now, and it is expected that this added feature will increase utilization of this zero-down loan program.
|USDA Streamlines the Issuance of Conditional Commitment (Effective 8-26-2015 and 10-1-2015)
Significant changes are being made to the way that you are allowed to upload documents to USDA-GUS – and these changes will make your life easier! You can now upload documents into the system once an application has been established versus waiting for the whole file to be processed for final submission. Just be sure to follow the new guidelines and attached bulletins carefully until you are accustomed to the new process, as there are a couple of important process changes. (USDA Streamline Issuance of Conditional Commitment )
|USDA Upfront Guarantee Fee and Annual Fee Schedule Effective October 1, 2015 - June 2015 Unnumbered Letter. [Download Mortgage Talking PointsTM flyer, USDA Increases Upfront Guarantee Fee – Effective 10-1-2015 ]
USDA Changing Guarantee Fee July 2015|
Important news is breaking from USDA regarding their Guarantee Fee. Effective October 1, 2015 the Guarantee fee will be increased to 2.75% from 2%. In this article you will find a reference table for calculating the Guarantee fee and a Guarantee fee calculator to use. (USDA Upfront Guarantee Fee and Annual Fee Schedule Effective October 1, 2015 - June 2015 Unnumbered Letter.)
|USDA-Property & Appraisal Requirements Update-[HB-1-3555-Chapter 12] (effective 5-14-2015) [Download Mortgage Talking PointsTM flyer, USDA Repair Escrow Requirements] AND [Download Mortgage Talking PointsTM flyer, USDA Water and Waste Disposal Systems Requirements]
The USDA is updating Chapter 12 of their HB-1-3555, regarding appraisal and property changes related to Fair Market Value, Intended User and HUD references. Based on the updates to the USDA handbook, we also created a couple of great Mortgage Talking Points™ articles for you to share with your real estate agents. (USDA-Property & Appraisal Requirements Update-HB-1-3555-Chapter 12-May-14-2015)
|USDA - Resource Assistance Document (RAD) & Quick Reference Guide - July 2015
USDA is releasing two new documents that demystify the USDA program. This is great news for lenders who wish to increase their production in USDA classified areas. The guides are easy to use, make great training tools, and cross-reference areas within the guidelines to simplify finding an answer quickly and easily. (USDA - Resource Assistance Document (RAD) & Quick Reference Guide July 2015)
|USDA Rural Development Applications - Electronic Submission (Effective March 28, 2015)
USDA Electronic Submission April 2015|
Over the past year, USDA Rural Development has implemented several process improvement projects to streamline/modernize the Guaranteed Loan Program. As of March 28, you can now streamline your process by submitting your completed loan applications electronically. A final submission in GUS will initiate an electronic task notification to USDA. The notification will alert USDA that a request is ready for processing. (USDA Rural Development Applications - Electronic Submission)
|USDA New Eligibility Maps (Agricultural Act of 2014, Pub. L. 113-79) - Effective February 2, 2015
USDA New Eligibility Maps January 2015|
USDA will implement new eligibility maps for loans that are received by the agency after February 2, 2015. The reclassifications will make some formerly rural areas non-rural and will expand other areas for USDA financing eligibility. Read additional commentary about what USDA says “constitutes a complete application” and download USDA FAQ “Rural In Character-related Eligibility Changes” (Agricultural Act of 2014, Pub. L. 113-79 (“Farm Bill”))
|USDA Rural Development Delays Applications Submissions to Convert to Handbook 3555 (Effective 11-21-14 to 12-1-14)
USDA Rural Development Delays Applications Submissions to Convert to Handbook 3555 November 2014|
Bottom line... for your files to be underwritten under the current RD regulations 1980-D, you better hurry and get your file submitted before November 21, 2014. If you fail to do so, you will not be able to submit your file until December 1, 2014 at which point you will be under the new Handbook 3555 regulations, which in some cases, are dramatically different and could jeopardize your loan approval should you not be aware of those regulatory changes. I also suggest that you read the FAQ’s in this article.
|USDA Systematic Alien Verification for Entitlements (SAVE) added to GUS
(Effective Date: December 1, 2014)
USDA SAVE added to GUS November 2014|
USDA Rural Development announced that on December 1, 2014 they will be adding “Systematic Alien Verification for Entitlements” (SAVE) to the Guaranteed Underwriting System (GUS). SAVE will assist lenders in determining whether non-U.S. citizens are qualified to receive a USDA RD Guaranteed Housing loan.
|USDA Rural Development Cracks Down on Incomplete Applications (Effective November 3, 2014)
USDA and Incomplete Files November 2014|
USDA Rural Development announced on November 3, 2014 that they will no longer tolerate sloppy loan submissions. The backlog can be directly attributed to incomplete and sloppy file submissions from participating lenders. The agency, in so many words, is telling the lending community that if you are going to send us a sloppy and incomplete file we will send it right back to you, and when you resubmit the file you go back to the end the line.
|USDA Rural Development Now Accepts Electronic Signatures (Effective October 1, 2014)
Electronic signatures have been legal in the United States since 2000, but USDA Rural Development has just now adopted this technology. This is very good news – and about time. Just think, no more overnighting, faxing or waiting for paper documents.
|USDA Delays AN 4748 Boundary Maps Until Further Notice (Effective 10-1-2014)
USDA Delays Implementation of Boundary Map October 2014|
USDA delays boundary and population maps until further notice. This means that if a community is eligible today, it will remain eligible under the continuing resolution.
|Impending Disaster Awaits – Are you ready for USDA Rural Development’s change in annual fee?
USDA Change in Annual Fee September 2014|
On October 1, 2014 the annual fee for both purchase and refinance loans will increase from .4% to .5%. The upfront guarantee fee of 2% of the loan amount will remain the same. The USDA has warned us that we should communicate with our Rural Development (RD) State Offices to understand current processing timeframes and determine which annual fee structure should be utilized for GUS submissions through September 30, 2014.
|Implementation of USDA Rural Development’s new Handbook 3555 SFHGLP regulations effective December 1, 2014. [Download Chart/Checklist, USDA Development HOUSEHOLD MEMBER, INCOME and ASSET DISCLOSURE Form ]
Lots of USDA rule updates starting 9114 August 2014|
Time’s almost up. As of December 1, 2014 USDA is supposed to implement their new regulations for the Single Family Housing Guaranteed Loan Program. The 7 CFR Part 3555 (Handbook 3555) replaces the present regulations known as 7 CFR Part 1980 Subpart D (Handbook 1980-D), and we do know that there are going to be some revisions to this draft version – considering that there is a December 1, 2014 implementation date, that\'s cutting it pretty close for the lending community to analyze, process and implement this new set of regulations. At the same time however, it\'s my understanding that the changes will be minor.
|USDA Instructions for LINC Application Login Problems
USDA lenders have been experiencing log in issues ever since LINC website has been updated. Read the step-by-step instructions on how to reset your browsers to make sure you can access your account.
|USDA to implement new Handbook 3555 September 1, 2014 for the Single Family Housing Guaranteed Loan Program (Effective September 1, 2014)
USDA New Handbook 3555 July 2014|
USDA Rural Development’s implementation of the new Guaranteed Rural Housing loan program regulations is almost upon us. The launch date for launch of 7 CFR Part 3555 (Handbook 3555) is September 1, 2014. It replaces the present regulations known as 7 CFR Part 1980 Subpart D (Handbook 1980-D) and the multiple administrative notices (ANs) currently in place. It will effectively be a one-stop shop for regulations. USDA has a list of training classes already on their website and subscribers can download the list of classes available to help you get started now.
|USDA Increases Annual Fee - RD AN No. 4757 [Effective 10-1-2014]
USDA Increases Annual Fee June 2014|
Even though the fee increase does not go into effect until October, start looking at how this change impacts your business and inform your referral partners and clients who are considering USDA financing.
|USDA Transitions to Automated Closings (Effective October 1, 2014)
While this does not affect LO’s directly, hopefully, you’ll get a quicker turnaround time to be notified if there are problems with the closing documents. Because it’s easier to find out right away and let the title company and borrowers know that something needs to be corrected rather than waiting a few months down the road.
|USDA New Rural Areas Defined – AN 4748 (Effective May 6, 2014 and October 1, 2014)
USDA Areas of Eligibility April 2014|
Frankly, at this point it is difficult to decipher exactly what the impact will be based on the full implementation of the changes as dictated by the 2014 Farm Bill (many USDA RD State offices are still trying to figure it out themselves). But one can quickly surmise based on existing Census data that the majority of more than 900 communities that were set to lose their eligibility will not do so once the new population figures are imposed. That\'s good news.
|Update USDA Pilot Program Expiration
Technically, the “Refinance Pilot Program” expired on Feb 28, 2014. However, USDA RD is about to release a new Administrative Notice (AN) that extends the current program with no guideline changes. Bottom line…business as usual for the Refinance Pilot program.
|Great News - USDA Rural Development Delays Changes to Eligible Areas Until 10-1-2014
There are some things we are glad to see delayed. This is one of them. USDA Rural Development announced that barring congressional action, they will begin using 2010 census data to determine eligible rural areas for USDA Rural Development housing programs on October 1, 2014.
|Notable changes to Refinancing USDA Rural Development Loans with release of (AN) 4738 – Effective October 24, 2013 [Download Chart - USDA Refinance Matrix]
USDA Refinance Matrix Chart November 2013|
Some significant changes occurred with the release of Administrative Notice (AN) 4738, on October 24, 2013 with regard to refinance transactions. You’ll find a USDA Refinance Matrix that you can print and refer to, to make sure your borrowers qualify.
|USDA Updates - Compensating Factors for Manually Underwritten Loans – AN 4729 – Effective September 1, 2013. [Download Mortgage Talking Points™ flyer, What You Need to Know to Qualify USDA Buyers - Compensating Factors (updated 9-1-2013)]
USDA Compensating Factors Updated November 2013|
Sorry this is late, but this update went into effect on 9-1-13. The only change to the “compensating factor” list is that USDA will now consider a 12-month (verified) rental history from a relative. You’ll find an Updated Mortgage Talking Point™ – What You Need to Know to Qualify USDA Buyers: Compensating Factors!
|Important Reminder - USDA Rural Development 2010 Census Data Implementation – Eligible Rural Area Changes (Effective 10-1-13)
USDA Eligibility Area Maps Changing September 2013|
“Complete” applications on hand as of close of business September 30, 2013, may be processed using 2000 Census Data for determining property eligibility. If you currently have an application on hand for a community which will become ineligible on October 1, it is important that you confirm that a “complete” application has been submitted to the agency no later than September 30, 2013. Link to USDA Eligibility Map included.
|USDA Rural Development rolls out Automated Lender Loan Closing System (Effective 7-30-13)
USDA Rural Development announced the rollout and availability to lenders of the “Automated Loan Closing System.” This will make the closing functions for the Guaranteed Housing loan program much easier. I advise all lenders to hurry and get their loan closing user agreements into the Agency as soon as possible, since processing of the request for access to the system will be handled on a first-come first-served basis. Download the guides and information at the end of this article.
|USDA Rural Development Increases Allowed Origination Fee on the Rural Refinance Pilot Program – AN 4720 (Effective July 16, 2013)
USDA and Refinance Pilot Program August 2013|
Since USDA RD caps the “Origination Fee” that may be paid by a borrower, it’s important that lenders itemize the fees included in the “Our Origination Charge” line on the HUD-1 Settlement Statement... similar to the way a lender would itemize the lender fees on a VA loan. Lenders may accomplish this in one of two ways. Read this article so you can avoid potential post-closing and audit issues.
|USDA Rural Development Issues New Standardized Income, Origination, and Closing Templates (Effective May 1, 2013) [Download Chart/Checklist, USDA Household Member Disclosure Form]
USDA Rural Development Issues New Standardized Income Origination and Closing Templates May 2013|
If you have files in process or pre-quals you’ve reviewed prior to May 1, 2013, you may want to pull all of those files and make sure the borrower’s income and assets are okay and they still qualify. These updated clarifications are mandatory and adopted by every USDA regional office to provide consistency and quick turnaround times.
|New Debt-Ratio Waivers Guidelines issued by USDA Rural Development – AN 4710 (Effective May 1, 2013) [Download Mortgage Talking Points™ flyers, What You Need to Know to Qualify Your USDA Buyers - Compensating Factors]
Qualifying USDA Buyers Compensating Factors May 2013|
You talk about a huge incentive to make sure you utilize USDA’s Guaranteed Underwriting System (GUS) on all your RD loan submissions…this Administrative Notice does just that. Any lender currently not utilizing GUS will be severely handicapped. Note: This does not apply to refinances.
|USDA Delays Changing Loan Limits/Community Participation for Single Family Housing Programs – AN 4711 [Expires 9-30-13]
USDA Delays Changing Loan Limits April 2013|
Delaying implementation of the 2010 Census Data for area eligibility determination for Rural Development Programs is welcome news. Had Congress not acted, the 2010 Census Data would have disqualified more than 900 communities that have been protected since the 1980s and that represent 40 percent of the program\'s current loans. Pay special attention to what USDA outlines as a COMPLETE LOAN GUARANTEE REQUEST and review it with everyone who touches USDA files.
|USDA Updates Underwriting and Loan Closing Doc Matrix – AN 4699. Charts/Checklists: USDA Underwriting and Closing Chart
USDA Underwriting Guidelines February 2013|
What we have done for you is to compare the “old” versus “new” updates, highlighted them in yellow and made notations in red to help you find “what’s new.” Some changes may impact your borrower regarding new future employment moving from 90 days to 60 days. In another example, when using savings as a Nontraditional Tradeline, you must now show 3 months PITI in reserves vs. 2 months. (RD AN No. 4699 Dated December 14, 2012)
|USDA Expands Pilot Rural Refinance Program to 16 More States – Overview of Pilot Program AN 4707 – January 24, 2013
USDA Special Refinance Program February 2013|
USDA has added16 new states to their Rural Refi Pilot Program. If you are located in one of these states, read up on how you can refinance without the need to obtain a credit report or appraisal. The original states were: Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oregon, Rhode Island, South Carolina and Tennessee. The new states are: Alaska, Arkansas, Colorado, Idaho, Kansas, Missouri, Montana, North Dakota, Oklahoma, Puerto Rico, South Dakota, Texas, Utah, Washington, West Virginia and Wisconsin.
|USDA Comments and Provides Direction for Avoiding Charging Excessive Fees AN 4701 – January 7, 2013
The USDA wants to be assured that borrowers that use the Guarantee program are not charged differently than borrowers that use similar loan programs like FHA and VA. By not complying with the guidance from this announcement, not only do you run the risk of being terminated from participating in the SFGHLP, you also run a huge risk of being accused of discrimination.
|USDA Announcement Regarding In-Ground Swimming Pools – AN 4701
USDA InGround Pools February 2013|
USDA is back again clarifying the swimming-pool-reduction-in-loan-amount rule. After reading this, you may decide not to loan on homes with in-ground swimming pools and look at FHA or Conventional (VA if Veteran) to avoid the possibility of not being able to sell the loan.
|USDA Guaranteed Loan Income Limits for 2013 (Effective 2-22-13)
USDA Income Limits February 2013|
USDA new income limits apply to loan applications taken on or after 2-22-13. This article has the direct link to the pages you need to view. However, if your link looks like mine, it’s really hard to read the income limits by county. I suggest that you review them, create your own document, distribute, email and post info on Facebook yourself.
|USDA Outbuildings and Property Eligibility Requirements - RD AN 4688 (1980-D) dated October 18, 2012 [Download Mortgage Talking Points™, USDA Outbuilding & Property Eligibility Rules]
USDA Financing for Outbuildings November 2012|
USDA is providing additional guidance with this AN for properties that have outbuildings. The regulation itself does not require or prohibit the ‘related facility’ from being attached or detached from the residence. It also does not limit the number of garages or total number of structures. More importantly, state offices must follow the guidance of the national office and may not impose their own limitations on ‘related facilities’.
|USDA Clarifies the Meaning of “Conventional Credit” Again - RD AN No. 4687 [Download Mortgage Talking Points™, USDA Loans & the Meaning of Conventional Credit—Who Qualifies?]
With this clarification, you need to consider if your borrower qualifies for other loan programs. If you place them in a USDA guaranteed loan program, you should do a thorough job on your loan comparison with them relative to your disclosures.
|USDA Postpones the Elimination of Certain Areas Due to Income Report Flaws from the 2010 Census Data – Until March 27, 2013
USDA has postponed eliminating certain cities October 2012|
In our August 2012 issue we wrote about a notice from the USDA that would require the use of the 2010 census data for program area eligibility. Since that time Rural Development has recognized some issues with the 2010 Census and says that it would be irresponsible to implement using the data because the collection information on the 2010 census data was changed. (RN AN No. 4679: Implementation of 2010 Census Data for Rural Development Programs)
|USDA Increases Fees to the Guarantee & Annual Fees & Advises of Funds Availability (Effective October 1, 2012)
USDA Money Gone for remainder of 2012 September 2012|
Inform your borrowers and real estate agents of the delayed timeframes, the increase in fees, and that the refinance funds have been exhausted. If you used the old fees, you’ll have to re-disclose. (Advance Notice: Changes to Guarantee and Annual Fee)
|USDA Announces Changes to Guarantee and Annual Fees and Eliminates Certain Cities or Communities from Eligibility (Effective October 1, 2012). [Download Chart/Checklist, USDA – Preliminary List of Ineligible Cities (Subject to Change) Effective 10-1-12]
Guarantee Fees are increasing, and you’ll need to get your conditional commitment by 9-30-12 in order to lock in the lower fees. Review your pipeline to make sure you don’t have to pay the difference if you miss the date. USDA is also eliminating some cities/communities. This list is “preliminary” and we will publish an updated one when available. (Advance Notice: Changes to Guarantee and Annual Fee)
|USDA Announces Restrictions on Lenders with Delinquent Tax Debts or Felony Convictions (Effective 7-26-12) [Download Chart/Checklist, USDA Form AD 3030 “Representations Regarding Felony Conviction and Tax Delinquent State of Corporate Applicants]
Each lender that provides financing using USDA funds must, prior to issuance of a loan note guarantee, complete and include in each file a representation regarding felony convictions or tax delinquent status (this applies to both the company and employees) . Each representation must be unique to the loan file that is submitted for loan note guarantee and not be a blanket signed document. (Notice: Restrictions on Companies with Delinquent Tax Debts or Felony Convictions – Dated 8/3/2012)
|USDA – Updates Guide on non-lender use of the Guaranteed Underwriting System (GUS)
So what are they really saying? Do not allow unapproved lenders that you do business with to access GUS using your approval. The consequences could include termination of the USDA housing programs. (RD AN No. 4655 (1980-D) June 11, 2012 )
|USDA Student Loans and Debt-To-Income Ratio Guidance (Effective 6-19-12)
USDA and Student Loans July 2012|
USDA updates “How to figure Student Loan Payments,” which may have an impact relative to qualifying. Make sure you ask borrowers that have student loans what documentation they have available as early in the loan process as possible to avoid any issues later in the process. (Electronic Notice Dated 6-19-2012 )
|USDA Rural Development issues Administrative Notice (AN) 4635 “Refinancing Single Family Housing Loans”
Refinancing USDA May 2012|
This change for both the 502 Direct and 502 Guaranteed Housing program loans is that “No further inspections or repairs are required by Rural Development.” They do note however that the lender may still require inspections or repairs. This change alone will make it much easier to refinance existing RD loans. This requirement was particularly burdensome and costly on streamline refinance transactions. (USDA Rural Housing – AN 4635 – Refinancing Single Family Housing Loans)
|USDA Rural Development issues HUGE update to the “Rural Refinance Pilot” AN 4634
This AN 4634 announced a significant change to the Rural Refinance Pilot program by now allowing borrowers to finance eligible loan closing costs in addition to the principal loan balance and the one-time upfront guarantee fee. I can’t begin to stress how huge a change this is. Previously, under guidance of AN 4615, accrued interest, closing costs, and lender fees were NOT eligible to be added to the refinance loan…NOW THEY CAN BE ADDED!!!. (Late fees are still not allowed to be rolled in.) (USDA Rural Housing – AN 4634 – April 2, 2012)
|USDA Makes It Easier to Determine if Property Is Eligible for USDA Financing—Enhanced Map
USDA Field Map May 2012|
This map is really easy to use. While it’s is not the “final word” on whether the property is located within a rural housing eligibility area, it is designed to give you a pretty good idea! Send the link to your agents.
|USDA RD Revised RD 1980-21 Form: “Request for Single-Family Housing Loan Guarantee” [Download Charts/Checklists: USDA Annual Fee Disclosure Form AND . USDA RD 1980-21 Form]
Assuming that anyone actually reads the small print, the USDA felt this revised wording was necessary at add clarity to the annual fee collection process, particularly due to the fact that it is the servicing lender that is actually paying the fee from the additional annual fee collected monthly from the borrower(s).
|USDA Updates Guaranteed Loan Income Limits (Effective January 18, 2012)
USDA Income Limits February 2012|
Check your state and county to determine if income limits have changed in your area. In most areas, they are higher. Just a reminder—if you are located in one of the 19 states eligible for the USDA Refinance Pilot Program, you do not need to check or use these new income limits even if borrower’s income is higher.
|USDA RD Addresses Annual Fee Payment Issues
USDA RD issued a memo reminding lenders to NOT pay any portion of the newly implemented annual fee of .30% (effective October 1, 2011) to USDA RD in advance.
|USDA RD announces Refinance Pilot Program – AN 4615 (Effective Feb 1, 2012 ) [Download Charts/Checklist: USDA Refinance Pilot Program FAQ’s]
USDA Refinance Pilot Program February 2012|
While this pilot refinance may be better than HARP, it’s only available in 19 states. The really good news is that borrowers in these states will be able to refinance their current USDA mortgage with no credit report, no appraisal and no property inspections.
|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.
|USDA Sneaks In “Authorized User Accounts” Underwriting Rule to GUS
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.
|New USDA FAQ (9-7-11): Implementation of Annual Fee (Effective October 1, 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)
|USDA RD Updates Indemnification Policy & Revises Maximum Allowed Interest Rate – Federal Register [76 FR 31217] (Effective 8-1-11)
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.
|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.
|USDA RD Guarantee Fee change to go into effect October 1st, 2011 [Download Charts/Checklists: USDA Guarantee Upfront & Annual Fee Calculator Forms]
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.
|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)
|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.
|USDA RD changes how maximum interest rate is determined on Guaranteed Housing Loans (Effective August 1, 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.
|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.
|USDA Refinancing Single Family Housing Loans – Annc. 4549 - [Download Charts/Checklist: USDA Refinance Rural Development Matrix - Streamline/Non-Streamline]
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.
|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]
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]
|USDA New Form 1980-21 “Request for Single Family Housing Guarantee” (Effective December 5, 2010). [Download Charts/Checklists: Form RD 1980-21 - Job Aid]
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)]
|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.]
|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.
|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.
|USDA Funding/Fees Updated for Guaranteed Rural Housing Program
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.
|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
|USDA – SFH Underwriting and Loan Closing Reminders – April 7, 2010 [Link to Updated Forms]
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]
|USDA Underwriting and Loan Closing Reminders: Multiple Subjects (January 20, 2010) RD Instructions
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!
|USDA Announces 2 Pools of Funds for Refi’s
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!
|USDA Flood Zone Waiver Authority Eliminated (Effective Immediately)
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.
|USDA Clarifies Medical Deductions & Annual Income Calculations
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.
|USDA Provides Guidance on New versus Existing Homes – (Includes AN 4414 and AN 4364 Administrative Notices.)
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)
|USDA Requires Appraisal Form 1004MC (Effective July 1, 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)
|USDA Now Allows In-Ground Swimming Pools - But May Reduce Loan Amount (Effective May 28, 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)
|Expect U/W Delays - USDA Single Family Housing Guarantee Loan Program
Could be weeks in underwriting! Warn your clients and real estate agents. Check closing dates. Get those contracts extended.
|USDA Increases Income Limits for SFHGLP.
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)
|USDA Rural Development Single Family Housing Funds Available - Mortgage Talking PointsTM "Quick Reference Guide to USDA Loans" (Effective March 20, 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)