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Final7CFRPart3555andHB13555Revisions

ORIGINATION

SingleFamilyHousingGuaranteedLoanProgramMarch2016

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GuaranteedLoanProgramRegulation7CFRPart3555 InterimfinalruleeffectiveDecember1,2014 FinalRulePublished:FederalRegisterFebruary8,2016 FinalRuleEffective:March9,2016

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7CFRPart3555SubpartA:General.1:Applicability.2:Purpose.3:CivilRights.4:Mediationandappeals.5:EnvironmentalRequirements.6:Stateandlocallaw.7:Exceptionauthority.8:Conflictofinterest.9:Enforcement.10:Definitionsandabbreviations

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7CFRPart3555SubpartB:LenderParticipation.51:Lendereligibility.52:Lenderapproval.53:Contractingforloanorigination.54:Saleofloanstoapprovedlenders

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7CFRPart3555SubpartC:LoanRequirements.101:LoanPurposes.102:Loanrestrictions.103:Maximumloanamount.104:Loanterms.105:Combinationconstructionandpermanentloans.107:Applicationforandissuanceofloanguarantee.108:Fullfaithandcredit

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7CFRPart3555SubpartD:UnderwritingtheApplicant.151:Eligibilityrequirements.152:Calculationofincomeandassets

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7CFRPart3555SubpartE:UnderwritingtheProperty.201:Siterequirements.202:Dwellingrequirements.203:Ownershiprequirements.204:Securityrequirements.205:Specialrequirementsforcondominiums.206:Specialrequirementsforcommunitylandtrusts.207:SpecialrequirementsforPlannedUnit

Developments(PUDs).208:Specialrequirementsformanufacturedhomes.209:RuralEnergyPlusloans 7

7CFRPart3555SubpartF:ServicingPerformingLoans.251:Servicingresponsibility.252:Requiredservicingactions.253:Latepaymentcharges.254:Finalpayments.255:Borroweractionsrequiringlenderapproval.256:Transferandassumptions.257:Unauthorizedassistance

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7CFRPart3555SubpartG:ServicingNonPerformingLoans.301:Generalservicingtechniques.302:Protectiveadvances.303:Traditionalservicingoptions.304:Specialservicingoptions.305:Voluntaryliquidation.306:Liquidation.307:Assistanceinnaturaldisasters

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7CFRPart3555SubpartH:CollectingontheGuarantee.351:Loanguaranteelimits.352:Losscoveredbytheguarantee.353:Netrecoveryvalue.354:Lossclaimprocedures.355:Reducingordenyingtheclaim.356:Futurerecovery

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GuaranteedLoanProgramTechnicalHandbookHB13555 RevisionDocument:DistributedthroughGovDeliveryFebruary22,2016

RevisedHB13555PublishedandEffective:March9,2016

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HB135551.Overview2:RecordRetention3:LenderApproval4:LenderResponsibilities5:OriginationandUnderwritingOverview6:LoanPurposes7:LoanTermsandConditions8:ApplicantCharacteristics9:IncomeAnalysis10:CreditAnalysis 12

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HB1355511:RatioAnalysis12:PropertyandAppraisalRequirements13:SpecialPropertyTypes14:FundingPriorities15:SubmittingtheApplicationPackage16:ClosingtheLoanandRequestingtheGuarantee17:RegularServicing PerformingLoans18:ServicingNonPerformingLoans19:CustodialandRealEstateOwnedProperty20:LossClaims CollectingontheGuarantee 13

ORIGINATIONREVISIONS Chapter5:OriginationandUnderwritingReviewthru

Chapter16:ClosingtheLoanandRequestingtheGuarantee

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TIPS Underwriter= USDAApprovedLender USDA=notanunderwriter ResearchRule&HBquestions:Control+F ResearchHBquestions:TableofContents

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7CFRPART3555FINALRULEREVISIONS

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7CFRPart3555:3555.5

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Additionalinsuranceoptionsincluded.

Clarificationforexistingdwellings:noneedtoconsideralternatives

7CFRPart3555:3555.5

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Clarificationforprivatefloodinsuranceadded

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7CFRPart3555:3555.5

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FinaladdedforLOMA/LOMR

Newdwellingsinfloodzones,ifalternativesanalysisperformed:compliantwithAgenciesNationalEnvironmentalPolicyActregulation

7CFRPart3555:3555.101

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Discountpointsmaybefinancedforallapplicants(lowincomeonly,removed)

Regulationcitationscorrected

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7CFRPart3555:3555.101

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Clarificationaddedforprincipalbalanceofloanandexclusionofaccruedinterest

ClarificationaddedtorefertoHB13555foradditionalguidanceasapplicable

7CFRPart3555:3555.103

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Regulationcitationcorrected

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7CFRPart3555:3555.104

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FreddieMacinterestrateoptionremoved

7CFRPart3555:3555.105

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Manufacturedhomesisremovedasineligibleforthesinglecloseconstructionloan.Eligiblesitecondosareeligible

guaranteewasremovedafterAnnual

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7CFRPart3555:3555.107

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LatechargesattributedtopaymentoftheannualfeeduemayNOTbepassedtotheborrower

7CFRPart3555:3555.108

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Clarificationtorevokeoriginatinglenderseligibilityaddedwhentheregulationisnotmet

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7CFRPart3555:3555.151

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loanadded

Chapter13bankruptcyguidanceadded

7CFRPart3555:3555.256

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Regulationcitationcorrected

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7CFRPART3555/HB13555REVISIONSAND

LEARNINGCHECKS

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Chapter5:OriginationandUnderwritingOverview NEW:OmittedaccountsrequiretheNotesinGUStobecompleted(5.3F)

NEW: Lendersshoulduseelectronicdocumentdelivery(5.3J)

NEW:GUSCreditReports:IfthereportinGUSwillexceed120daysatloanclosing,butanewreportrevealsnochangestocredit,noresubmission/revisionisrequired(5.3M)

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Chapter5:OriginationandUnderwritingOverview PurchasePrice:$175,000 Whatamountofeligibleassetswillindicatethehouseholdmayqualifyforconventionalcredit?

A.$35,000B.$35,000plusclosingcosts/etc.

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Chapter5:OriginationandUnderwritingOverviewANSWER:5.2A

B.$35,000plusadditional$$forclosingscosts,etc.

$175,000x20%=$35,000 Verifyadditionalmoneyforrequiredcosts EnsureapplicantdoesnotqualifyforaconventionalloanpercurrentFannieMaeand/orFreddieMacguidelines

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Chapter5:OriginationandUnderwritingOverview Openauthorizeduseraccount CreditsupplementobtainedoutsideofGUSdocumentsthisaccountasclosed

GUSAcceptuw recommendationmayberetained

A.TRUEB.FALSE

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Chapter5:OriginationandUnderwritingOverviewANSWER:5.2A

B.FALSE

CreditreportinGUSmustbeaccurate GUScannotacceptsupplementreports

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Chapter5:OriginationandUnderwritingOverview January:$1,115.79 February:$2,546.46

Correctassetentryforreservecalculation:A.$1,831.25B.$2,546.46

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Chapter5:OriginationandUnderwritingOverviewANSWER:5.3E

A.$1,831.25

Lessorof: Twomonthaveragebalanceor Currentbankstatement/recentVOD Inflatedreserves=unsupporteduw recommendation

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Chapter5:OriginationandUnderwritingOverviewWhichoptionisthecorrectwaytoomitadebtinGUS?A.

B.

C.

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Chapter5:OriginationandUnderwritingOverviewANSWER:5.3FB.

DebtmustbemarkedOmit Notesdatafieldmustbecompleted

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Chapter5:OriginationandUnderwritingOverview

AcompleteFormRD355521includestheincomeworksheet.

A.TRUEB.FALSE

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Chapter5:OriginationandUnderwritingOverviewANSWER:5.3J

A.TRUE

TheincomeworksheetispartofFormRD355521 IncomeWorksheethasbeenremovedasaseparaterequireditem

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Chapter5:OriginationandUnderwritingOverview

Lendersareencouragedtoelectronicallyuploadoriginationandloanclosingdocuments.

A.TRUEB.FALSE

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Chapter5:OriginationandUnderwritingOverviewANSWER:5.3J

A.TRUE

UploadDocumentsinGUS LenderLoanClosingLLCSystem SAVEYOURPAPERFORGROCERYLISTS

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Chapter5:OriginationandUnderwritingOverview

CreditreportinGUShasexceeded120days(expired) CreditpulledoutsideofGUSverifiesnochanges

LendermayretaincurrentconditionalcommitmentwiththeexpiredcreditreportinGUS.

A.TRUEB.FALSE

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Chapter5:OriginationandUnderwritingOverviewANSWER:5.3M

A.TRUE

Nochanges=issuedconditionalcommitmentisvalid Newcredit/adverseimpact=resubmit

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Chapter6:LoanPurposes NEW:Discountpointsmaybefinancedforallapplicants(6.3)

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Chapter6:LoanPurposes

Discountpointsmaybefinancedforallapplicants.

A.TRUEB.FALSE

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Chapter6:LoanPurposesANSWER:6.3

A.TRUE

Nolongerrestrictedtoonlylowincomeapplicants Eligibleloanpurposeuptomaximumloanamountper3555.103

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Chapter6:LoanPurposes

USDAhasinternalthresholdsforlenderpoints,fees,andcharges.

A.TRUEB.FALSE

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Chapter6:LoanPurposesANSWER:6.2C

B.FALSE

USDArequireslenderstofollowFederalandStatelaws CFPBpublishesguidelines

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Chapter8:ApplicantCharacteristics Manufacturedhomeunitsnotonpermanentfoundationsareconsideredfunctionallyinadequate(8.2A)

Overcrowdingroomcount:Donotincludebathroomsorentryhall/foyer(8.2A)

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Chapter8:ApplicantCharacteristics Tradeline andadversecreditrequirementsremovedfromconventionalcreditqualifications(8.2B)

NEW:Educationalsavingsplans/529Plansarenotconsideredforconventionalcreditassetqualification(8.2B)

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Chapter8:ApplicantCharacteristics Militaryapplicantoccupancy:Dischargerequirementwithinoneyearremoved(8.2C)

LenderdatabasesthatutilizeSAMareacceptable(8.2E)

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Chapter8:ApplicantCharacteristicsWhichmanufacturedhomeisfunctionallyinadequate?

A.

B.

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Chapter8:ApplicantCharacteristicsANSWER:8.2A

B.

Notonpermanentfoundation Mayberetaine