RHS Adopts Final Rule Amending Single Family Housing Guaranteed Loan Program

RHS adopted a final rule amending the Single Family Housing Guaranteed Loan Program (SFHGLP). The final rule follows publication of the December 9, 2013, interim final rule and makes changes to the SFHGLP in response to public comment and further consideration of certain issues by RHS. Specifically the final rule: clarifies terminology and provides editorial and technical changes to correct cross-references; expands an applicant’s ability to purchase a flood insurance policy for a dwelling in a Special Flood Hazard Area from a private insurance company; allows discount points, as a permissible loan purpose, to ‘‘buy-down’’ the interest rate for moderate income applicants in addition to low-income applicants; permits lenders to establish the interest rate with the current Fannie Mae posted yield for 90- day delivery (actual/actual) for 30-year fixed rate conventional loans plus 1 % (rounded up to the nearest one quarter of 1 %) and removes language applicable to the Freddie Mac required net yield; removes language limiting a contractor or builder to 25 units per year unless approved by RHS; provides that the combination construction and permanent loan feature of the SFHGLP may be utilized for a manufactured home if the builder’s contract includes the sum of the cost of the unit and all on-site installation costs; provides authority to extend the guarantee to coincide with the terms of a loan modification that meets the eligibility criteria; and provides authority to extend the guarantee to coincide with the terms of an extend term loan modification that meets the eligibility criteria. The final rule becomes effective March 9, 2016.

RHS SFHGLP Final Rule (02-08-16)