RHS Releases Final Rule for Single Family Loan Program

Filed in Codes and Standards, Housing Finance by on February 9, 2016 0 Comments

rules and regulations

The U.S. Department of Agriculture’s Rural Housing Service (RHS) published a final rule on Feb. 8 implementing changes to its Single Family Housing Guaranteed Loan Program (SFHGLP).

Designed to streamline the program, the final rule:

  • Removes the cap on the number of units per year for a single contractor or builder under the combination construction and permanent loan feature. It also allows a combination construction and permanent loan to be used for a manufactured home if the builder’s contract includes the sum of the cost of the unit and all on-site installation costs.
  • Allows discount points as a permissible loan purpose to “buy down” the interest rate for moderate-income borrowers, as well as for low-income borrowers.
  • Extends the SFHGLP guarantee to coincide with the terms of a loan modification, including an extended-term loan modification so that the guarantee will cover the duration of the loan.
  • Permits lenders to charge a maximum interest rate equal to the Fannie Mae posted yield plus 1%, but removes language from a 2013 interim rule referencing the Freddie Mac required net yield, since Freddie Mac no longer publishes its net yield rate.

The final rule becomes effective March 9, 2016.

For more information, email Chellie Hamecs at NAHB or call her at 800-368-5242 x8425.

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