RHS Amends the Single-Family Housing Guaranteed Loan Program

The Rural Housing Service has issued a Final Rule to implement changes to the Single-Family Housing Guaranteed Loan Program.  This will revise, among other things, the requirements for federally supervised lenders, standards of minimum net worth and experience for non-supervised lenders, requirements for approved lender participation, and builder credit standards.

One notable change is the addition of more stringent financial requirements for non-supervised lenders. All lenders that are not supervised by federal entities must have (i) either a minimum net worth of $250,000 or at least $50,000 in working capital plus one percent of the total volume in excess of $25 million in guaranteed loans originated, serviced, or purchased during the lender’s prior fiscal year up to the maximum adjusted net worth of $2.5 million; and (ii) at least one line of credit with a minimum aggregate of $1 million.