**U.S. Department of Agriculture North Dakota Instruction 1980-D**

**Rural Development**

**Part 1980 -** General

**SUBPART** **D** - Rural Housing Loans

1980.301 [Introduction]{.underline}

This instruction supplements and adapts FmHA Instruction 1980-D for
Rural Housing loan guarantees to conditions in North Dakota.

1980.301 (c) [Program Administration]{.underline}

Processing of Single Family Rural Housing Guaranteed Loan Program For
North Dakota.

Guaranteed Rural Housing Loan Program applications will be processed by
the Rural or Local Office from the lenders located in their service
area. Rural Development staff will provide lenders information and
guidance in processing a Rural Housing Guarantee.

The lender will submit the application to the appropriate Rural
Development office for processing.

1980.309 (d) [Handling Applications for Lender Eligibility]{.underline}

Each approved lender is listed on Exhibit A of this Subpart. For
information concerning out-of-state lenders approved by the National
Office, contact the State Office.

1980.311(b) [High-Cost Areas and Maximum Mortgage Loan
Limits]{.underline}

High-Cost areas and maximum mortgage loan limits are established and
periodically updated by the Department of Housing and Urban Development
(HUD). High cost areas and maximum loan limits are indicated in Exhibit
B of this subpart.

1980.320 [Interest Rates]{.underline}

If the lender is using the North Dakota Housing Finance Agency (NDHFA)
First-Time Home Buyer Program, the interest rate charged by the
participating lender will be determined by the ND Housing Finance
Agency. It is not to exceed the published rate for VA first mortgage
loans with no discount points or the current Fannie Mae rate, whichever
is higher. The contact person at NDHFA is Michael A. Anderson, Director,
Single Family Programs, Box 1535, Bismarck, ND 58502, phone number (701)
328-8060.

DISTRIBUTION: S, A, L Guaranteed Loans

General

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1

**North Dakota Instruction 1980-D**

The rate charged may not exceed the current Fannie Mae posted yield for
90-day delivery (Actual/Actual) plus six-tenths of 1 percent for 30-year
fixed rate conventional loans. Call the Fannie Mae 24 hour hot-line

at 1-800-752-7020 to obtain the current rate. The lender must document
the rate and date it was determined.

1980.341(b) [Inspection of Construction and Compliance
Reviews]{.underline}

Inspections must be made by a party the lender determines is qualified.
For existing dwellings, inspections must be made to determine compliance
with HUD HANDBOOK 4150.1, 4905.1 and FmHA Thermal Standards prior to
submission to Rural Development for a Conditional Commitment. Lenders
may use Exhibit C of this Subpart to assist them in these inspections.

1980.345(f) [Credit Alert Interactive Voice Response System
(CAIVRS)]{.underline}

Approved lenders must verify through HUD\'s CAIVRS if the
applicant/borrower is delinquent on any Federal debt. Exhibit D is a
step by step script for lenders to use to access the CAIVRS system.

When a lender is approved, the State Office completes Exhibit E and
submits it to the Finance Office in order for the lender to access
CAIVRS. There may be a lender(s) who was approved prior to the State
Office completing Exhibit E who can not access CAIVRS. If a Field Office
is made aware of a lender who cannot access CAIVRS, the Field Office
must complete Exhibit E and fax it to Guaranteed Loan Processing, Attn:
David Ryffel, at (314) 539-3110.

1980.351 [Request for Reservation of Funds]{.underline}

When an originating approved lender receives a feasible loan application
and before loan underwriting, the lender must request a Reservation of
Funds for the application. This is to be done when the lender has a
complete application that clearly indicates the borrower has sufficient
qualifiying income and an adequate credit history.

In order to reserve funds, the lender must complete Form RECD 1980-86,
"Reservation of Funds". This form is to be sent to the Rural Development
office that will be processing the application. When the Rural
Development office receives the form, they will fax it to the State
Office to enter on the system and issue the Reservation of Funds to the
lender.

1980.353(C) [Filing and Processing Applications]{.underline}

A checklist, Exhibit F, has been developed to assist in the sequential
processing of the application. The checklist is divided into five
sections indicating who is responsible for each phase of the process
from origination to selling on the secondary market. To facilitate
processing, the use of the telephone and fax machine is encouraged to
obtain complete applications.

2

**North Dakota Instruction 1980-D**

1980.354(a) [Funding Authority]{.underline}

Field Office loan approval authority is in accordance with FmHA
Instruction 1901-A.

1980.370(d) [Loan Servicing]{.underline}

Lenders are to provide field offices with RD 1980-81, "Guaranteed Rural
Housing Borrower Default Status," when a borrower becomes delinquent.
Field Offices will keep the original and provide copies to the Finance
Office and State Office. Field Offices will establish a tracking system
to monitor delinquent borrower accounts. The State Office will be
consulted on all cases involving liquidation of an account by the
lender.

1980.392 (b) [Funded Buydown Accounts]{.underline}

Borrowers who qualify for a Guaranteed Rural Housing loan may also
qualify for the North Dakota Housing Finance Agency (NDHFA) Step Rate
Interest Program. This program permits the borrower's monthly payment to
be reduced during the first two years of the loan. The Step Rate Program
provides an interest rate reduction for the first and second year of the
loan. The third and all the following years of the loan will be at the
note rate. Even though the interest rate is reduced during the first two
years, the loan is still considered to be a fixed rate loan.

All borrowers who qualify at the third year interest rate, which is the
note rate, are eligible. Borrowers who qualify at the first and second
year reduced interest rate are also eligible when the lender provides
acceptable documented compensating factors. The compensating factors
must indicate the borrower's ability to meet the expected increase in
loan payments starting on the third year.

Attachments: Exhibit A, B, C, D, & F

o0o

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**North Dakota Instruction 1980-D**

**Exhibit B**

**[MAXIMUM MORTGAGE LOAN LIMITS]{.underline}**

Guaranteed Rural Housing Loans may not exceed the Basic Limit, unless
the eligible property is located in a designated \"high-cost\" area
identified by the Department of Housing and Urban Development (HUD).
There are currently five counties in North Dakota which have been
established as high cost-areas. They are as follows with their
corresponding loan limits.

Cass County \$ 99,800

Morton County \$ 95,100

Burleigh County \$ 95,100

Grand Forks County \$101,050

Ward County \$ 91,750

All Other Counties \$ 86,317

(Basic Limit)

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**North Dakota Instruction 1980-D**

**Exhibit C**

[INSPECTION REPORT]{.underline}

EXISTING DWELLINGS

FOR

RURAL HOUSING SERVICE

GUARANTEED RURAL HOUSING

Applicant's Name

Property Address

Lender's Name

Address

I certify the existing dwelling located at the above address has been
inspected for the purposes indicated in FmHA Instruction 1980.341. The
property:

\_\_\_\_\_ does \_\_\_\_\_ does not meet the requirements of HUD
Handbook 4150.1 and 4901.1. If it does not meet, list what has be done.

\_\_\_\_\_ does \_\_\_\_\_ does not meet the Thermal Standards according
to FmHA

> Instruction 1980.313(f). If it does not meet, list what has to
>
> be done.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Date Signed

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Title

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**North Dakota Instruction 1980-D**

**Exhibit D**

Page 1

Rural Housing Service (RHS)

Guaranteed Rural Housing (GRH) Program

The following instructions are for lenders approved to participate in
the RHS GRH program for use in determining if the applicant for a GRH
loan is delinquent on a Federal debt:

1\. To access HUD's Credit Alert Interactive Voice Response System
(CAIVRS)

**dial (301) 344-4000**

CAIVRS SCRIPT: "Welcome to the HUD, Voice Response System. To access the
Credit Alert System, press 1. To access the Line of Credit of Control
System, press 2. If you have completed your call, press 0. Thank you."

2\. **ENTER 1**

CAIVRS SCRIPT: "You have reached the HUD, Credit Alert System. Please
enter your Credit Alert Access Code, and then press #."

3\. **ENTER** the CAIVRS ACCESS CODE which is the **Lender's Tax ID
Number, then press #. (Note: Nine digit I.D.'s should be preceded by
"0")**

CAIVRS SCRIPT: "If you are processing:

A HUD Title 1 loan, press 1.

An FHA, Single Family Mortgage loan, press 2.

A HUD 312, LPA, press 3.

A Veterans Administration loan, press 4.

USDA Rural Housing loan, press 5.

A Rural Development loan, press 6.

A Department of Education loan, press 7.

A Small Business Administration loan, press 9."

etc.

4\. ENTER 5, then press \#

CAIVRS SCRIPT: "Please now enter applicant's Social Security or Tax
Identification number."

**5. ENTER applicant's SS number or Tax ID number.**

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North Dakota Instruction 1980-D

Exhibit D

Page 2

**6. ENTER Y or N as appropriate**

CAIVRS SCRIPT: CAIVRS will return one or more of the following
responses, depending on the information returned from the Unisys:

"There are no cases for this applicant.

There is a claim for this applicant.

There is a default for this applicant.

There is a foreclosure for this applicant.

There are multiple cases for this applicant.

There is a Department of Justice Judgment against this applicant."

CAIVRS will return one or more of the following messages if applicable:

"Title 1

FHA Single Family Mortgage

HUD 312

Veterans Administration Loan

USDA Rural Housing Loan

Rural Development Loan

Small Business Administration Loan

Department of Justice

Department of Education Loan" etc.

In conjunction with each of the above cases, should any exist, CAIVRS
will return one or more of the following messages including the case
number and contact point:

"Claim

Default

Foreclosure

Judgment"

"Credit Alert confirmation number is ." (see notations below)

-   *The Lender will clearly document both its CAIVRS identifying number
    (its Tax I.D. number) and the borrower's/coborrower's CAIVRS
    confirmation number near the signature line on the borrower's loan
    application form.*

-   *For Lenders using the Mortgageware or other similar software
    package, do not enter fifth position of the confirmation number
    which is alway a "0." This will result in a nine character CAIVRS
    confirmation number as opposed to the current ten character CAIVRS
    confirmation number.*

> "If you would like the access information repeated, press 1. Or, if
> you would like to enter another applicant number for the same type
> loan, press 2. Or, for a different type loan, press 3. To return to
> the main menu, press 0. If call completed, you may hang up now."
>
> "Thank you for using the HUD Voice Response System."

7\. Enter your choice or hang up.

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