Removing Barriers Blog

USDA Tweaks Single Family Housing Guaranteed Loan Program
Posted May 03, 2016 by CUNA Advocacy

The Rural Housing Service, an agency of the Department of Agriculture, recently made some positive changes to its Single Family Housing Guaranteed Loan Program. Effective June 2, the final rule amends aspects of the Program related to lender indemnification, refinancing, and qualified mortgage requirements.

As part of the Agency’s efforts to improve and expand the risk management of the Program, the final rule expands the Agency’s lender indemnification authority for loss claims in the case of fraud, misrepresentation, or noncompliance with applicable loan origination requirements. In addition, the rule amends the Program’s refinancing provisions to simply require that the new interest rate not exceed the interest rate on the original loan and added a new refinance option called the Streamlined-Assist Refinance program.

Finally, the rule amends the Program to indicate that a loan guaranteed by the Agency is a Qualified Mortgage if it meets the CFPB’s QM requirements.