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Rural Development
Single Family Housing Programs
Promoting Homeownership in Underserved Markets
Joyce AllenDeputy Administrator for Single Family Housing
October 20, 2014
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Rural Development
Rural Areashttp://rdeligibility.usda.gov/eligibility/welcomeAction.do
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Rural Development
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Rural Development
Rural Areas
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Rural Development
Guaranteed Loan Program Overview
No down-payment required 30 year fixed interest rates Guaranteed Underwriting System Automated Loan Closing System Mostly purchase transactions, 3-8% refinance 85% first time homebuyers 10% new construction Low and moderate income households Rural areas = up to 90% of the USA
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Rural Development
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Rural Development
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Rural Development
New Regulation
7 CFR 3555 replaces old regulation Effective December 1, 2014 Handbook Expanded interest rate cap Construction to permanent financing
promotes new construction in rural areasReplace aging housing stock
Delegated servicing decisionsApproval of loss mitigation actionsApproval of property disposition plans to lender
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Rural Development
Guaranteed Loan Program
Construction to Permanent Loans Also known as “Single Close” loans Encourages new construction in rural areas Lender gets guarantee before construction begins Interest payments during the construction period can come from
interest reserve account or from the borrower Borrower rests assured because the financing is all arranged up
front Reduces credit risk because newly built home require less
maintenance• Won’t need new roof for 20 years• Won’t need new furnace for up to 7 years• New appliances in kitchen and laundry• Everything is brand new• Less maintenance means better cash flow for borrowers
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Rural Development
Guaranteed Loan Program
Automated Loan ClosingLenders should sign up nowPaperless processingElectronic submission of documentsElectronic submission of guarantee feesElectronic delivery of agency formsLenders save money by:
• No longer cutting paper checks• No more overnight delivery fees• Receiving their Loan Note Guarantees much faster
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Rural Development
Training Opportunities Sign up for Automated Loan Closing
https://usdalinc.sc.egov.usda.gov/USDALincTrainingResourceLib.do
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Rural Development
LISTSERV: LISTSERV: www.rdlist.sc.egov.usda.govwww.rdlist.sc.egov.usda.gov
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Rural Development
What is loan application packaging?Packaging is an optional service that may be
used by applicants to obtain direct single family housing assistance from the Rural Housing Service (RHS).
Packagers, who are separate and independent from RHS, help applicants navigate the loan application process.
Section 502 Direct ProgramPartnering Through Loan Packaging
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Rural Development
Certified Loan Application Packaging Process
Proposed rule published on August 23, 2013 (78 FR 52460 – 52464); final rule is expected in the near future.
Through the rulemaking, the loan application packaging process currently in place will be strengthened and improved. Requirements will be placed on eligible individuals to become Agency-certified packagers and on qualified nonprofit organizations and public agencies that employ certified packagers. The requirements will cover experience, training, proficiency, and structure.
Packaging in the Future
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Rural Development
Questions