Rural Development
Single Family Housing Programs
Promoting Homeownership in Underserved Markets
Joyce Allen
Deputy Administrator for Single Family Housing
October 20, 2014
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Rural Areas
http://rdeligibility.usda.gov/eligibility/welcomeAction.do
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Rural Areas
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Guaranteed Loan Program Overview
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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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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 areas
 Replace aging housing stock
 Delegated servicing decisions
 Approval of loss mitigation actions
 Approval 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
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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 Closing
 Lenders should sign up now
 Paperless processing
 Electronic submission of documents
 Electronic submission of guarantee fees
 Electronic delivery of agency forms
 Lenders 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: www.rdlist.sc.egov.usda.gov
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Section 502 Direct Program
Partnering Through Loan Packaging
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.
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Packaging in the Future
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.
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Questions