Thursday, March 28, 2013

Shrinking USDA Rural Areas Postponed

Update: Changes to the housing eligible areas map based on 2010 Census data scheduled to take effect 1/15/14, have been postponed to 10/1/14 by passage of the Consolidated Appropriations Act, 2014. View "Future Eligible Areas." Complete applications received before October 1, 2014, will continue to use rural area definitions based on 2000 Census data. -1/24/14

Updated and revised PDF replaced 3/29/13:

In an earlier email dated March 28, 2013 (and revised on March 29, 2013) from USDA Single Family Housing Guaranteed Loan Program the changes to designated Rural areas have been postponed.
On March 26, 2013, the President signed “H.R.933 -- Consolidated and Further Continuing Appropriations Act, 2013” which provides funding through September 30, 2013.  The Bill also extends the eligible rural areas that were in effect as of September 30, 2012 until September 30, 2013 for Rural Housing Service rural housing programs.
Administrative Notice (AN) 4711 was issued on March 27, 2013 and was updated on March 28, 2013. (Updated AN attached)This AN is a replacement of AN 4679, “Implementation o2010 Census Data for Rural Development Programs”, which was issued on September 27, 2012.  Additionally, a stakeholder announcement was released on March 28, 2013 http://www.rurdev.usda.gov/RD-StakeholderAnnouncements.html.
Furthermore they define their definition of "application received" in order to be included in the discontinued area within the extended time frame of September 30, 2013.

Loan Guarantee Processing

A complete loan guarantee request received by Rural Development on or before September 30, 2013, will not be subject to the new rural area designations that will take place on October 1, 2013, barring any Congressional action that extends current eligibility areas.  Applications received by close of business on September 30, 2013 and processed on/after October 1, 2013, due to state loan processing times, will be subject to the newly designated rural areas if the application is incomplete.  A complete loan guarantee request represents the following documents. 

Transaction Type:  Purchase and Standard Non-Streamlined Refinance
     Guaranteed Underwriting System (GUS) Accept Underwriting Recommendation
  •  
Form RD 1980-21, “Request for Single Family Housing Loan Guarantee.”
  •  
Evidence of qualified alien, as applicable.
  •  
FEMA Form 81-93, “Standard Flood Hazard Determination Form.”
  •  
Uniform Residential Appraisal Report (URAR) with Market Condition Addendum (MC 1004).

Transaction Type:  Purchase and Standard Refinance*
     Manually Underwritten, without assistance of the GUS
     GUS Refer or Refer with Caution Underwriting Recommendation
     GUS Accept Underwriting Recommendation Receiving Lender Message 31063 or 31113
  •  
Form RD 1980-21, “Request for Single Family Housing Loan Guarantee.”
  •  
Evidence of the lenders loan underwriting analysis. (FNMA 1008/FHLMC 1077 or similar)
  •  
Uniform Residential Loan Application (URLA).  (FNMA 1003/FHLMC 65)
  •  
Evidence of qualified alien, as applicable.
  •  
Credit report and any credit documentation (explanation/compensating factors/credit waiver documents) supporting the underwriter’s decision.  (Explanation of credit, compensating factors or credit waiver documents is not required to be submitted to Rural Development for a GUS Accept underwriting recommendation receiving lender message 31063 or 31113.)
  •  
Full income documentation of all adult household members to verify eligible household income.  Include asset verification, if applicable.
  •  
Documentation verifying the stable, dependable income to support the lender’s determination of repayment income. 
  •  
Ratio waiver request and documentation of compensating factors, if applicable.  (Explanation of credit, compensating factors or credit waiver documents is not required to be submitted to Rural Development for a GUS Accept underwriting recommendation receiving lender message 31063 or 31113).
  •  
Purchase contract and any addenda, as applicable.
  •  
FEMA Form 81-93, “Standard Flood Hazard Determination Form.”
  •  
Uniform Residential Appraisal Report (URAR) with Market Condition Addendum (MC 1004).  (A URAR is not required for a streamlined refinance transaction). 
*Refinance transactions for the rural refinance pilot will follow AN 4634 or replacement guidance for a list of complete documents.

To assist Rural Development in processing your loan guarantee request expeditiously, lenders should ensure only the documentation noted above is submitted to Rural Development for review.  Excessive documentation will cause delays in reviewing your loan guarantee request.
Lenders must retain in their permanent origination files all documents required by RD Instruction 1980-D.

Questions regarding this notification may be directed to the Single Family Housing Guaranteed Loan Division at 202.720.1452.

To apply for this or any other loan program contact me today.