Policy
Shawn Poynter / There Is More Work To Be Done
Shawn Poynter / There Is More Work To Be Done
On October 19, 2015 an ‘Important Notice to Loan Application Packagers and Rural Development Staff’ was forwarded through this GovDelivery system. Since that time, many questions have been received regarding the applicability of that notice to loan packaging for Self-Help Housing.
Clarification for Self-Help Grantee loan packagers and Rural Development staff is given as follows:
While non-self-help application packagers are required to ‘instruct their clients that a property must not be identified in the application unless and until such time as the Agency issues a Certificate of Eligibility’; Self-Help packagers are to continue with their current practice of submitting loan and construction packages to Rural Development.
The Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Mortgage Disclosures (TRID) requirements are applicable to Rural Development (RD) upon receipt of the ‘complete loan application’. This includes self-help packages that contain all required items constituting a complete application under the TRID rule. Self-Help packagers must coordinate package submittal timeframes with the local RD office. Based on workload, RD Staff should intake application packages in a manner that ensures the TRID timeframes are meet.
For more information about the TRID process, please refer to the ‘Implementation of the TILA-RESPA integrated Mortgage Disclosure for Direct Section 502 and 504 Loan Programs’ sent via this delivery system on October 5, 2015 or other related materials.
Effective on the date of this notice, the processing sequence for preparing loan application packages on behalf of very low- and low-income persons seeking a Section 502 direct single family housing loan has changed to account for the following:
The stages currently outlined in Handbook-1-3550, Attachment 3-A, and in Form RD 1944-12, Rural Housing Loan Application Package, are hereby modified as outlined below.
Steps are being taken by the Agency to revise Attachment 3-A and Form RD 1944-12. However, these revisions will take some time.
As it relates to loan application packaging, packagers and Rural Development staff should be aware of the following:
While this notice is written from the perspective of the program’s handbook, the above guidance similarly applies to intermediaries operating under the loan application packaging pilot.
The Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Mortgage Disclosures (TRID) rule issued by the Consumer Financial Protection Bureau (CFPB) became effective on October 3, 2015. Any loan, Section 502 or 504, is subject to the TRID regulation if a security interest will be taken on the property. This regulation is expected to have an impact on almost every aspect of the mortgage transaction, including activities performed by lenders and third-party settlement service providers. Given this, Rural Development (RD) has developed training materials and conducted webinars for RD staff working with Single Family Housing Direct (SFHD) loans. In addition to this, an unnumbered letter to supplement HB-1-3550 guidance is currently in clearance. Below are selected highlights of this guidance: