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Loan Application Packaging Express |
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September 30, 2024 Issue 20 |
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Message from the Deputy Administrator
Greetings! On July 31, 2024, Ms. Cathy Glover Deputy Administrator, Single Family Housing, retired after 35 years of federal service leadership focused on affordable housing. With Ms. Glover’s retirement, it is my honor to introduce myself as the new Deputy Administrator, Single Family Housing, Rural Housing Service.
Affordable housing is vital to rural America’s economic stability and growth. Housing is a foundational building block of strong communities. USDA Rural Development is committed to providing those affordable housing opportunities. In Fiscal Year 2024, USDA Rural Development Single Family Housing programs successfully obligated over $1.1 billion in direct loan and grant programs.
Our packaging partners deserve tremendous recognition for their contributions toward the Agency’s accomplishments. Packagers bring important awareness of USDA homeownership programs to underserved rural communities; and provide homebuyers with assistance throughout the loan application process to help them not only get into their homes but continue to be successful homeowners.
Under our agreements with Housing Assistance Council, NeighborWorks America, and Rural Community Assistance Corporation to offer the certification training; there were eight Certified Loan Application Packaging Trainings provided in Fiscal Year 2024.
As we begin Fiscal Year 2025, I want to share my heartfelt appreciation for all that our packaging partners have done and will continue to do to support affordable housing in rural America.
Christine Mechtly
Deputy Administrator
USDA, Single Family Housing
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Brian Murray, New York USDA Rural Development (RD) State Director, and USDA RD staff in New York recently gathered with Habitat for Humanity (HFH) of Otsego County to celebrate the newest homeowners in Oneonta, New York’s McFarland Meadow housing development. Over the past couple years, Rural Development staff have been working closely with Jerry Blechman, President of the Board of Directors for HFH of Otsego County to line up financing for many of the family’s homes being constructed on McFarland Road. Blechman, a retired professor at the State University of New York (SUNY) Oneonta has been instrumental in family recruitment and application referrals to USDA. Many of the new homeowners in McFarland Meadow are university support staff, whom Jerry interacted with on campus. Each hard working, dedicated staff at the University with a unique life story and in need of affordable housing.
The McFarland Road HFH families share the commonality of their community while also representing a variety of demographics and cultural backgrounds. Featured above is the Altni family, who immigrated to the United States from Libya and became US citizens a couple of years ago. Alia and Ramzi left their home country and, in the case of Alia, leaving her career as a dentist to provide a better life for their young family in America. Ramzi is a custodian at the Fenimore Art Museum in historic Cooperstown, NY and Alia is a full-time mom of their three young active boys. In time, Alia hopes to go back to college and fulfill the requirements in the US to again practice dentistry. Their own home provides the affordability and structured environment for her to eventually rebuild her career in the US. USDA and HFH are a proud partner in helping the Altni family to fulfill their American dream; part of which, being homeownership.
Also celebrated was the Carpenter Family, featured in front of their new home completed in June 2024. Louis, a maintenance worker at SUNY Oneonta easily met the HFH sweat equity requirement for the home construction and continues to be a handyman and volunteer to neighbors, whose homes are under construction. This was evidenced the day of the homeownership celebration when he and Ramzi helped each other to plant and landscape the flowering hydrangea trees presented from Rural Development staff. Before we were ready for photos, Louis had planted, mulched, watered and built a stone feature around each tree!
Habitat for Humanity of Otsego County has been a tremendous partner with USDA Rural Development. The next three builds on McFarland Road will also be financed by Rural Development withfamilies lined up and ready. The soon-to-be neighbors of the Carpenter and Altni families were also on site to share in the homeownership celebration, while simultaneously performing sweat equity on their own under construction homes.
Staff from Rural Development also presented the McFarland Road families with flowers in hand painted pots decorated by children of the very employees that processed and underwrote the loans for these families. These were eagerly accepted jobs assigned to the children about a month prior for “Bring Your Child to Work” day.
Beyond the USDA gifted flowers and trees depicted in the photos, if you look carefully on the window sill, you will see branded, “Rockefeller Center the Christmas Tree 2020.” The Christmas tree that adorned Rockefeller Center in 2020 was donated from a family in Oneonta NY. When the tree came down after the holidays, the wood was milled and donated to Habitat for Humanity. That same Christmas tree, which symbolized the peace, hope and giving spirit of the holiday season, will forever reside in the homes of each of these Oneonta families.
Together, USDA Rural Development and Habitat for Humanity are building homes, planting trees and hope – one family at a time.
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Hello, my name is Art Marrujo. I am a Housing Specialist with the Housing Assistance Council (HAC) with15 years of experience in affordable housing development and nonprofit management in addition to 15 years in the mortgage private banking industry. My expertise lies in developing affordable housing from preplanning, financing, construction, and completion of housing units. I thrive on the challenges presented in creating affordable housing for low-income families.
In my current role as a Housing Specialist at HAC, I provide technical assistance to nonprofit and government agencies in the development of affordable housing and creating housing programs as well as capacity building of the organization to be successful in their mission. I also act as an approved non-Agency co-trainer for the USDA Section 502 Direct Loan Application Packaging training program.
Before joining HAC, I worked at Tierra del Sol Housing Corporation located in Las Cruces, New Mexico, as a Housing Director. During my tenure there, I was involved in several housing developments both as a team participant and as a project manager overseeing the development of both single and multifamily housing, including managing the Rural Development 523 contracts and 502 packaging.
I hold a bachelor’s degree in finance and economics from New Mexico State University.
Outside of work, I am passionate about sports and outdoor activities with my family which include baseball, softball, football, camping, hunting, and fishing but most importantly watching my daughter play travel softball.
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The Direct Loan Application Packagers Page provides USDA program training, an intermediary coverage map, and other resources. Be sure to bookmark and visit the site often to check for updates.
We are happy to report the Federation of Appalachian Housing Enterprises (Fahe) has expanded their intermediary coverage to Louisiana. This expansion will provide additional intermediary coverage in the state. The Intermediary Coverage Map, available on the Direct Loan Application Packagers site has been updated to include all recent changes to coverage areas.
Worksheet for Computing Income & Max Loan Calculator:
- The worksheet, also referred to as the 4-A Worksheet for Computing Income, was updated on July 12, 2024 (v.2 PR), due to the posting of updated income limits.
- Revision notices for the 4-A Worksheet for Computing Income are provided via GovDelivery and the most current version is always available on the Direct Loan Application Packagers site under Resources.
- Packagers should ensure that the most current version (July 12, 2024 (v.2 PR)) is used when submitting a loan application package.
- During leap year, remember to use 366 days for year-to-date calculation.
Preliminary Credit Analysis: As part of the complete Phase 1 loan application packager, the packager provides a preliminary credit analysis and a copy of the applicant(s) credit report. Items to consider as part of the analysis:
- For the Section 502 program, if, and only if, the applicant’s credit score is less than 640, Form RD 1944-60, Landlord’s Verification, should be obtained as part of the credit analysis. If more than one landlord is listed on the 410-4 for the last 2 years, separate copies of Form RD 1944-60 for each landlord should be provided.
- For applicants that do not use traditional credit, or that have less than two credit scores, nontraditional credit sources should be obtained to develop a credit history from three sources. However, only two sources are required if one of those is a verification of rent or mortgage payments.
- Non-traditional credit should never be used to enhance the credit of an applicant with a negligent credit history or to offset derogatory references found in the applicant’s traditional credit report, such as collection judgments, even if the traditional credit is insufficient.
- Applicants should provide a written explanation for credit blemishes (see Attachment 3-J, Checklist of Items to Accompany the URLA).
- Exhibit 4-4, Indicators of Unacceptable Credit, provides information on adverse credit which must be considered as part of the credit analysis.
- If an applicant does not qualify for a streamlined credit analysis (see HB-1-3550, Chapter 4. Paragraph 4.12), RD will use Form RD 1944-61, Credit History Worksheet, which is a tab available on the 4-A Worksheet for Computing Income. Although this form is completed by the Agency, this can be a helpful resource for packagers to review as part of their credit analysis.
Non-taxable Income and Grossing Up:
- Why can non-taxable income be grossed up in the Section 502 Direct Program? The Standard PITI and TD ratio limitations assume the applicant income is taxable. If a particular source of income is not subject to Federal taxes, for example, certain types of disability payments or military allowances, the amount of continuing tax savings attributable to the nontaxable income source will be added to the applicant’s repayment income by grossing up qualifying income.
- Nontaxable income, such as Housing Choice Vouchers, social security, child support, or alimony payments (if the instrument was executed or modified after 12/31/18), will be multiplied by 120 percent to “gross up” such income provided the nontaxable income is stable and is expected to continue for at least two years.Please see HB-1-3550, Chapter 4, Paragraph 4.4 for further information on non-taxable income.
- Child support payments that are not expected to continue for the next two years are not grossed up and not considered toward repayment income. Example, child is 16 ½ years old and court appointed child support agreement states support will end when the child turns 18.
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Please visit 502 Loan Application Packager Training for a calendar of events and registration information related to upcoming certified loan application packager trainings which are provided by approved non-Agency trainers.
Completion of an approved course is required for a loan application packaging certification and provides:
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A review of the Section 502 direct loan program and the regulations/laws that govern the program.
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A detailed discussion of the program’s application process and borrower/property eligibility requirements.
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An examination of the Agency’s loan underwriting process which includes the use of payment subsidies, and the roles and responsibilities of a certified loan application packager, their qualified employer, an intermediary (as determined necessary by a RD State Director), and the Agency staff. Course participants should take the corresponding test within 30 days of completing the course.
Single Family Housing Direct Loan Programs USDA Rural Development
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1400 Independence Ave. SW Mail Stop 0783 Room 2211 Washington, D.C. 20250 |
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USDA is an equal opportunity provider, employer, and lender. |
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