SFH Guaranteed Servicing
July 31, 2024
Single-Family Housing Guaranteed Loan Program
Announces the Payment Supplement Account Pilot
The Single-Family Housing Guaranteed Loan Program (SFHGLP) is pleased to announce the Payment Supplement Account (PSA) Pilot. With the current market trends of higher interest rates, the SFHGLP recognizes the challenges our servicers face to provide effective loss mitigation, resulting in adverse outcomes for distressed homeowners in need of servicing relief.
The PSA Pilot will assist borrowers who have experienced a documented hardship that led to an involuntary inability to pay their mortgage obligation, require payment reduction to resume making a monthly payment and currently have a below market interest rate. The borrower must occupy the property and be ineligible for all other loss mitigation retention solutions prior to being reviewed for the PSA pilot.
The PSA will be funded by a Stand-alone Mortgage Recovery Advance (MRA) which will be incrementally utilized to first, payoff the arrearages accumulated during a hardship to bring the loan current and second, to supplement the principal portion of the borrower’s payment in monthly increments and provide payment relief for three years. The PSA will remain with the servicer’s lien as a non-interest-bearing, recoverable servicing advance. The MRA created under this pilot program will not be secured by a second lien in favor of Rural Development, which eliminates the need for notary fees, recording costs, and additional legal fees.
A complete list of parameters and terms for the PSA Pilot have been published in the Federal Register. This pilot is effective July 24, 2024 and is anticipated to continue until July 24, 2026.
If you are interested in participating in this pilot or have any questions regarding this announcement, please contact the National Office Division at sfhglpServicing@usda.gov or (202) 720-1452.
Thank you for supporting the Single-Family Housing Guaranteed Loan Program.
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