September 21, 2017
Fiscal Year 2018 Conditional Commitment Notice
Fiscal Year 2018 (FY) is soon
approaching and we are asking our originating lenders to take a few minutes to
review the Single Family Housing Guaranteed Loan Program (SFHGLP) Conditional
Commitment process. We hope you find
this information helpful.
Background: At
the beginning of each fiscal year, funding for the guaranteed loan program is
not available for a short period of time –approximately two weeks. USDA anticipates this brief lapse in funding
to continue for FY 2018. FY 2018 will
begin October 1, 2017 and ends at the close of business September 30, 2018.
Issuance of Conditional Commitments: During the
temporary lapse in funding, Rural Development will issue Conditional
Commitments (Form RD 3555-18/18E) “subject to the availability of commitment
authority” for purchase and refinance transactions.
The application processing
workflow is as follows:
- Rural Development will continue to accept complete guaranteed loan applications for purchase and refinance loan transactions from approved lenders;
- Rural Development will process, approve, and issue Conditional Commitments for those applications that are eligible “subject to the availability of commitment authority”;
- Lenders may close loans as scheduled;
- When funds become available, Rural Development will obligate (reserve) funds for Conditional Commitments that were issued for loans subject to the availability of commitment authority;
- Once loans are obligated, Rural Development may process lender’s Loan Note Guarantee requests when the loan closing is verified and all conditions of the Conditional Commitment are satisfied;
- Lenders assume all loss default risk for the loan until Rural Development is able to obligate the loan and issue the Loan Note Guarantee.
Please refer to the Unnumbered Letter: Conditional Commitments Issued during the
Beginning of Fiscal Year 2018 for more information.
Fee Amounts for FY 2018: An upfront guarantee fee of 1.00 percent and an annual fee of .35
percent will apply to both purchase and refinance transactions for FY 2018.
Thank you for your participation in the USDA Single Family Housing
Guaranteed Program. We look forward to
serving you in FY 2018!
Questions regarding this announcement may be directed to the
National Office Division at (202) 720-1452.
|
