Kentucky USDA Mortgage Loans Affected by COVID-19

Kentucky Rural Housing USDA Implements Immediate Measures to Help Rural Housing Loan Program  Affected by COVID-19

WASHINGTON, April 1, 2020 – USDA Rural Development has taken a number of immediate actions to help rural residents, businesses and communities affected by the COVID-19 outbreak. Rural Development will keep our customers, partners, and stakeholders continuously updated as more actions are taken to better serve rural America.

* Visit www.rd.usda.gov/coronavirus for information on Rural Development loan payment assistance, application deadline extensions, and more.

OPPORTUNITIES FOR IMMEDIATE RELIEF

Rural Development Guaranteed Loan Programs

Effective immediately until September 30, 2020, lenders may offer 180-day loan payment deferrals without prior agency approval for Business and Industry Loan Guarantees, Rural Energy for America Program Loan Guarantees, Community Facilities Loan Guarantees, and Water and Waste Disposal Loan Guarantees. For additional information, see page 17721 of the March 31, 2020, Federal Register.

Rural Housing Service

Single-Family Housing

Effective March 19, borrowers with USDA single-family housing Direct and Guaranteed loans are subject to a moratorium on foreclosure and eviction for a period of 60 days. This action applies to the initiation of foreclosures and evictions and to the completion of foreclosures and evictions in process.

Direct Loan Program:

• USDA has waived or relaxed certain parts of the application process for Single-Family Housing Direct Loans, including site assessments, and has extended the time period that certificates of eligibility are valid.

• A Direct Loan borrower who is experiencing a reduction of income by more than 10 percent can request a Payment Assistance package to see if he/she is eligible for payment assistance or for more assistance than currently received.

• Moratorium Assistance is available for Direct Loan borrowers experiencing medical bill expenses (not covered by insurance) or job loss because of COVID-19. Qualifying borrowers can receive a moratorium on house payments for a period of time, repaid at a later date.

• Direct Loan questions should be directed to USDA’s Customer Service Center at 800-414-1226 (7:00 a.m.-5:00 p.m. Eastern Time Monday-Friday) or https://www.rd.usda.gov/contact-us/loan-servicing. Call volume and wait times are high at this time.

Guaranteed Loan Program:

• Guaranteed Loan borrowers who are in default or facing imminent default due to a documented hardship can have payments reduced or suspended by their lender for a period not to exceed 12 months delinquency. Once the hardship is resolved, the lender can modify the loan to cure the delinquency or make up the missed payments based on the borrower’s individual circumstances.

•*USDA is granting lenders temporary exceptions pertaining to appraisals, repair inspections and income verification for the Single-Family Housing Guaranteed Loan Program (SFHGLP) due to theCOVID-19 pandemic. Effective immediately, the following exception sto Agency guidance found atHB-1-3555 are in effect for a period of 60-days.

*Residential Appraisal Reports–Existing DwellingFor purchase and non-streamlined refinance transactions, when an appraiser is unable to complete an interior inspection of an existing dwelling due to concerns associated with the COVID-19 pandemic, an “Exterior-Only Inspection Residential Appraisal Report”, (FHLMC 2055/FNMA 2055) will be accepted. In such cases, appraisers are not required to certify that the property meets HUD HB 4000.1 standards. The appraisal must be completed in accordance with the Uniform Standards of Professional Practice (USPAP) and the Uniform Appraisal Dataset (UAD).This exception is not applicable to new construction properties or construction-to-permanent loans. As a reminder, appraisals are not required for streamlined and streamlined-assist refinance transactions.

*Repair Inspections–Existing Dwelling: For loans for which a completion certification is not available due to issues related to the COVID-19 pandemic, a letter signed by the borrower confirming that the work was completed is permitted. Lenders must also provide further evidence of completion, which may include photographs of the completed work, paid invoices indicating completion, occupancy permits or other substantially similar documentation. All completion documentation must be retained in the loan file. This exception is not applicable to rehabilitation and repair loans noted in section 12.28 of HB-1-3555.

*Verbal Verification of Employment: Lenders must document and verify the borrower’s annual and repayment income in accordance with Agency regulations. Lenders should use due diligence in obtaining the most recent income documentation to re-verify the borrower’s repayment ability prior to closing. When the lender is unable to obtain a Verbal Verification of Employment(VVOE)within 10 business days of loan closing due to a temporary closure of the borrower’s employment, alternatives should be explored. For example, email correspondence with the borrower’s employer is an acceptable alternative to a VVOE. If the lender is unable to obtain a VVOE or acceptable alternative, the requirement will be waived when the borrower has a minimum of two months cash reserves. In the case of a reduction of income, the borrower’s reduced income must be sufficient to support the new loan payment and other non-housing obligations. Borrowers with no income at the time of closing are not eligible for SFHGLP loans regardless of available cash reserves.

Kentucky Rural Housing Loan Changes for 2020 for the  Single Family Housing Guaranteed Loan 

Kentucky USDA Loan Changes

Program Update: Single Family Housing Guaranteed Loan Program (SFHGLP) Integration

 This email is intended to provide lenders with advanced notice of upcoming changes to the Single Family Housing Guaranteed Loan Program (SFHGLP). These changes will not go into effect until December 2019, with staggered implementation through February 2020. Please continue business as usual until you receive additional communication.

Lender Partners,

Good Afternoon. As you may know, we are working to transition the Single Family Housing Guaranteed Loan Program (SFHGLP) into an integrated National model. We are excited for the benefits this integration will bring in providing a more efficient and customer-centric experience for our lenders and in increasing rural home ownership. As we approach go-live for the new organization, we wanted to update you on the new organizational model, transition dates, and what to expect in the coming months:

The New Organizational Model

We have been preparing for the future organization, and we look forward to integrating all staff into a single, National model. In the integrated organization, loans will be handled by one of four production teams responsible for all origination and processing activities. When states transition, they will be placed into one of the four production teams, taking with them any in-process loans as well as all new loans originated in their state.

In the attached one-page overview, you will find a map illustrating the states included in each production team.

Transition Dates

State loan volume and staff will transition to the new integrated model in a series of three waves. The projected transition dates are listed below:

Wave   

Projected Transition Date

States Included*

Wave 1

      December 8th

AZ, DE/MD, HI/WP, KS, LA, ME, NE, NH/VT, NM, NY, OR, PA, SD, VA, WY

Wave 2

      January 19th

AK, AR, CO, FL, GA, IA, ID, IL, KY, MI, MN, MO, MT, NV, PR, SC, TN, TX, WA

Wave 3

      February 16th

AL, CA, CT/MA/RI, IN, MS, NC, ND, NJ, OH, OK, UT, WI, WV

*States included in each wave are based on the property location for loan files submitted, not lender location

What to Expect

Prior to each wave transition, local, state, and national lenders will receive more specific information about state alignment to production teams and their transition date. Please continue to conduct business as usual until you receive these communications. These communications will also inform lenders of new point of contact information for questions. Lenders will be able to contact the production teams through four centralized email inboxes aligned to each production team as well as a general inquiries inbox. These email inboxes will be activated prior to Wave 1.

We are excited for the benefits that will come with this new integration, and we look forward to working with the lender community in providing a more efficient, customer-centric experience, increasing rural home ownership.

We greatly appreciate your continued support. Should you have any additional questions or comments, please don’t hesitate to reach out to SFHGLPintegration@usda.gov.

Thank you,

SFHGLP Integration Infographic_8Nov2019.pptx

 

Source: Program Update: Single Family Housing Guaranteed Loan Program (SFHGLP) Integration

Student Loan Changes to Kentucky Rural Housing Loans Approvals

 

RHS temporarily modified the calculation of non-fixed student loan payments for purposes of determining debt-to-income ratios. Per the modified requirements, lenders must now use the higher of .50% of the loan balance or the actual payment reflected on the credit report as the monthly payment (rather than 1% of the loan balance). The modified requirements went into effect September 23, 2019 and will be permanently incorporated into Chapter 11 of the Single Family Housing Loan Program Technical Handbook (HB-1-3555) in the near future.

 

BIG change announced for Kentucky Rural Housing USDA loans today regarding how minimum payments on your Student Loans are calculated. Reach out to see if you qualify for this awesome loan!

 

Have you or someone you know been turned down for a USDA loan recently because of student loans?
New guidelines effective today may allow you to qualify (or qualify for a little higher loan amount)

 

**This is not an offer for extension of credit or a commitment to lend. All loans must satisfy company underwriting guidelines. Information and pricing are subject to change at any time and without notice. Not all applicants will qualify for all loan products offered. This is not an offer to enter into a rate lock agreement under any applicable law. Not endorsed or part of USDA Federal Government Agency.

NMLS ID. 57916 www.nmlsconsumeraccess.org