Message from Moises


RD requires National Office agreement for some prepayment incentives. An Unnumbered Letter dated July 22, 2014 requires RD state offices to obtain advance approval before offering additional Rental Assistance or equity loans to Section 515 borrowers who want to prepay their loans. The UL says “these measures are an interim step while we process permanent changes to the regulation to incorporate a more effective process for developing and distributing equitable prepayment incentives.” Contact Tiffany Tietz, RD, 616-942-4111 ext. 126.

New guidelines apply to extensions and deobligations of unused Section 515, 514, and 516 funds. An Unnumbered Letter dated July 30, 2014 provides timeframes and processes for USDA staff. Limited extensions may be permitted. Contact Mirna Reyes-Bible, 202-720-1753 (Section 514/516) or Melinda Price, 614-255-2403 (Section 515).

RD approves online homeownership education provider for Section 502 borrowers. Online study can be used only if other formats are not available. Last year RD invited providers to apply for approval (see HAC News, 9/25/13 and 12/18/13), and an Unnumbered Letter dated August 22, 2014 announces the agency has selected Framework. Contact Shantelle Gordon, RD.

RD addresses thermal standards for manufactured housing. To be eligible for USDA financing, new manufactured homes must meet the HUD Code, which specifies what minimum thermal standards apply in each state. RD applies the standards at the county level, and Administrative Notice (AN) 4772 (Aug. 4, 2014) lists the standards for specified counties. Contact William Downs, RD, 202-720-1499.

USDA provides guidance for multifamily design/build and construction management proposals. AN 4770 (July 11, 2014) requires National Office approval to use Section 514 or 515 loans for design/build or construction management arrangements. Contact Sherry Engel, RD, 715-345-7677, or William Downs, RD, 202-720-1499.

USDA issues reminder about Section 515 borrowers that received damages in litigation. As part of the May 21, 2007 agreement that settled a lawsuit against USDA regarding prepayments, owners who received damages payments agreed that they cannot prepay their loans (unless USDA determines a property is no longer needed) and cannot receive incentives to discourage prepayment. An Unnumbered Letter dated June 24, 2014 provides guidance to RD staff about servicing these borrowers’ account. Contact Tiffany Tietz, RD, 616-942-4111 ext. 126.