Central Maine Blog

IMPORTANT UPDATES FROM RURAL DEVELOPMENT: Fiscal Year 2012 began on October 1st and brought many changes to Rural Development’s Single Family Housing Guaranteed Loan Program. First, as in recent years, we will be issuing Conditional Commitments to lenders “subject to the availability of commitment authority”. Since a continuing resolution has been passed by Congress and signed by the President, we expect this authority very soon. We anticipate funding authority of $24B nationally. This is the same amount we received this past year, and all funds were not committed by the end of the year. Based on this, we expect funding to be sufficient to carry us through the entire year.
 

The bigger change is the new annual fee. All Conditional Commitments issued after September 30, 2011, will be subject to an annual fee of 0.3%. This fee is based on the average scheduled unpaid principal balance of the loan. The fee will be charged for the life of the loan. Along with the implementation of the annual fee, the upfront guaranteed fee for purchase transactions is being reduced to 2 percent. The upfront fee for refinance loans will remain at 1 percent. The annual fee will be collected each month as part of the borrower’s monthly payment. The fee collected will be escrowed and paid to Rural Development at the end of each annual period for the borrower’s loan. A fee calculator can be found at: https://usdalinc.sc.egov.usda.gov/USDALincTrainingResourceLib.do

Other recent clarifications that have been issued: RD Administrative Notice 4590 dated July 22, 2011, clarifies outbuildings and when these buildings may or may not affect the overall eligibility of the property for the Guaranteed Loan Program; and RD Administrative Notice 4594 dated July 26, 2011, which clarifies the definition of conventional credit. Any applicant who qualifies for conventional credit, is not eligible to participate in Rural Development’s Direct or Guaranteed Loan Program. For full content of these notices: http://www.rurdev.usda.gov/rd-an_list.html. With questions: Guaranteed Loan Processing Center, 1423 Broadway, Suite 3, Bangor, ME 04401; (207) 990-3676, Option 4; or GLPC@me.usda.gov