July 14, 2014 – USDA’s Rural Housing Service has temporarily authorized three steps to speed processing of Section 502 direct loans, hoping to use all FY14 funding for these mortgages before the fiscal year ends on September 30. USDA Rural Development field staff are authorized to:
- approve and obligate Section 502 direct loans subject to receipt of an appraisal, rather than waiting for the appraisal before approving the loan;
- make a new loan when a borrower is purchasing a property from a seller who also has a Section 502 direct loan, rather than using the lengthier process of having the borrower assume the seller’s loan; and
- refinance existing loans in some circumstances when there is a high risk of foreclosure.