Rural Development

Single Family Housing Programs

Promoting Homeownership in Underserved Markets

Joyce AllenDeputy Administrator for Single Family Housing

October 20, 2014

Rural Development

Rural Areashttp://rdeligibility.usda.gov/eligibility/welcomeAction.do

Rural Development

Rural Development

Rural Areas

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

Rural Development

Rural Development

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

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

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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Training Opportunities Sign up for Automated Loan Closing

https://usdalinc.sc.egov.usda.gov/USDALincTrainingResourceLib.do

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LISTSERV: LISTSERV: www.rdlist.sc.egov.usda.govwww.rdlist.sc.egov.usda.gov

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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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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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Questions