UPDATE – Congress has passed temporary Continued Resolution meaning that changes to USDA Rural Housing eligible areas has been delayed until mid December.
What does this mean for PrimeLending and USDA Rural Housing?
USDA Rural Housing will continue to issue Conditional Commitments for loan transactions located in possible affected areas that are subject to change.
Because Congress passed Continued Resolution until mid December the USDA property eligibility changes have been “delayed” until that time. As for the conditional commitments between now and then they will be honored. We are anticipating that USDA Rural Housing will release further direction regarding exact dates and requirements for USDA Rural Housing property eligibility on or before mid December.
PrimeLending at this time does not have a required date of when Conditional Commitments must be received. In other words it is “business as usual” for USDA transactions, until further information is provided.
Previous Bulletin sent on August 27th, 2013:
USDA Rural Housing 2010 Census Data-Eligible Rural Area Change Reminder
March 27, 2013 USDA Rural Housing issued Administrative Notice (AN) 4711 and then was updated on March 28, 2013.
This Administrative Notice (AN) provided guidance to Rural Development (RD) National and State Office staff regarding the implementation of the 2010 Census data for use in the administration of direct loan, loan guarantee and grant programs across RD. The intended outcome is to instruct and inform RD National and State Office staff on appropriate data to be used as a source for population and income information needed for eligibility determinations and underwriting of applications for assistance filed pursuant to RD programs.
Barring any Congressional actions, implementation of the 2010 Census Data is on schedule for October 1, 2013, which will modify the eligible rural areas for the RHS housing programs. The future eligibility area maps can be viewed on the USDA Eligibility web site at:
Questions and Answers –
1. How do I determine if my USDA Rural Housing loan will be effected by this possible change?
a. USDA currently provides a “Future Eligible Areas” search tool, located on the USDA Eligibility web site: http://eligibility.sc.egov.
2. What if my subject property is located currently in an eligible area and will continue to be eligible based on the “Future Eligible Areas” map?
a. If your subject property is not affected by the possible eligible area changes effective October 1, 2013 then no action may be needed and you may proceed as normal.
3. How do I find out what the turn time is for the local USDA Rural Housing office to issue loan guarantees for USDA Rural Housing Loans ?
a. It is very important to contact your local USDA Rural Housing office to determine what the current turn times are to issue Conditional Commitments for Single Family Loan Guarantees. It has been noted that some offices may take up to one or two full business weeks (or longer) to issue conditional commitments loan guarantees for USDA Rural Housing loans.
4. What does “Barring any Congressional Actions” mean?
a. Barring any Congressional Action is referring to that Congress can still have an impact if or if not eligible areas for USDA Rural Housing will change effective October 1, 2013. If Congress does not pass a budget and instead passes temporary Continuing Resolution then it could push possible changes to USDA eligible areas back another 3 or 6 months, however nothing is certain at this time.
5. What states would have the largest impact of lost eligibility if the eligible area change went into effect?
a. If the USDA Rural Housing area changes do go into effect October 1, 2013 the states that will have the biggest impact based on percentage of eligible areas lost would be New Jersey, California, Hawaii, and Rhode Island. States that could see the largest impact based on dollar volume loss would be California, North Carolina, Texas, Washington and Arizona.
6. When will I receive notification of possible eligible area changes?
a. PrimeLending is working diligently and communicating with other investors as well as USDA Rural Housing to ensure that we are current and accurate with all possible changes that may be happening. Information will be shared with you as it is received as well as guidance and procedures.
7. What are three things that I can do to be prepared for the possible USDA Rural Housing eligible area change?
a. Check all current and possible future USDA loans for future eligibility through the USDA Eligibility web site: http://eligibility.sc.egov.
b. Contact your local USDA Rural Housing office and request current turn times for issuing loan guarantees. It is also advised that an additional 3-5 business days be added to the response received as USDA may see a large increase in volume if the eligible areas do change.
c. Inform and communicate with potential clients and other business partners that USDA Rural Housing eligible areas may be changing as soon as October 1, 2013. Again this is not certain as of yet, but it is a possibility to be prepared for.