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| USDA Rural Development                                                |
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| 375 Jackson St., Suite 410                                            |
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| St. Paul, MN 55101-1853                                               |
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| height="1.5097222222222222in"}                                        |
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# March 18, 2008

**MESSAGE FROM THE STATE DIRECTOR STEVE WENZEL**

As you will read throughout this newsletter, the Guaranteed
Single-Family Housing program is having a very busy year so far in 2008.
Our staff is working hard to continue the high level of service you have
come to expect and maintain our 24-48 hour turnaround time. On another
note, we have had a change in leadership in our Single-Family Housing
program. Lance Larson resigned as program director effective June 8,
2008, in order to pursue other opportunities that may be available to
him. Lance is working for the agency on special projects until June 8. I
have named Mike Monson and Scott Knutson interim co-program directors.
Both Mike and Scott have several years of experience within USDA Rural
Development of Minnesota and will do an excellent job of administering
the guaranteed program until a permanent program director is named.

Mike can be reached at <michael.monson@mn.usda.gov>, or (218) 829-5965.
Scott can be reached at <scott.knutson@mn.usda.gov>, or (507) 532-3234.

###  LOAN ACTIVITY

We have experienced a substantial increase in loan volume and lender
inquiries. Minnesota has obligated 751 loans as of March 18 compared to
489 one year ago, an increase of 53 percent. We also have received many
requests for training. Our first priority is the timely processing of
loan files. This means that at the present time we will not be able to
conduct individual training meetings as we have in the past. However,
please continue to request the training and we will try to put together
a series of workshops based on geographical areas and need. All
specialists are available to assist you by phone or email.

Files should be mailed, overnighted or scanned and e-mailed. Please
**[do not fax]{.underline}** credit packages. E-mailed files should be
sent to the general mailbox:
[**ug-mn-rd-gsfh@one.usda.gov**](mailto:ug-mn-rd-gsfh@one.usda.gov). Do
not send files to individual specialists unless it is a file that has
been submitted through the Guaranteed Underwriting System (GUS).

To assist us in providing a quick turnaround time: Submit your
reservation requests (1980-86, 1003 and first page of the purchase
agreement) at least two days prior to submitting your credit package.
Reservation requests must also be submitted for loans that are processed
through GUS. [Please do not submit partial or incomplete
files.]{.underline}

### REVISED CHECKLIST

Our goal is a 24-48 hour turnaround time on files. With the increased
loan volume, it's important that credit packages be submitted complete
and fully underwritten. The proposed closing date should be clearly
noted so files can be prioritized. Also, indicate where the original
Conditional Commitment should be mailed and also where it should be
faxed.

A revised checklist is attached. Note that the thermal requirement has
been removed. This change was effective 1/10/08. Please notify your
appraisers of this change.

There are only two Rural Development forms:

-   Form 1980-86, Request for Reservation of Funds (12/05 revision)

-   Form 1980-21, Request for Guarantee (6/06 revision)

The following forms are obsolete and should not be used:

-   MN 1980-2, Lender Cover Letter

> \- Form 410-9, Statement Regarding the Privacy Act

-   AD-1047 & 1048, Certification Regarding Debarment

-   MN 1980-66, Thermal Report

> \- HUD VC sheets

### APPRAISALS

There are some required items being omitted on appraisals which results
in additional conditions. The appraiser is to report listing information
in the subject area of page one. Often the appraiser only refers to the
purchase agreement. The information required is data sources used and
all listing dates and prices within the past 12 months. Other required
information that is often missing is the estimated site value, estimated
number of years remaining, economic life of the dwelling and number of
amps for the electrical service.

An inspection is required for existing homes per 1980-D, section
1980.341(b)(1)(i). This requirement can be met by one of the following
options:

1.  An appraisal prepared by an FHA roster appraiser. The appraiser must
    certify that the property meets the requirements of HUD Handbooks
    4905.1 and 4150.2. The certification can be made on page 3 of the
    appraisal in the "comment" section or in an addendum to the
    appraisal.

2.  If a non-FHA roster appraiser is used, a separate home inspection
    report prepared by a home inspector is required.

3.  Lenders may determine that a non-FHA roster appraiser is qualified
    to perform the home inspection if the lender is assured that the
    non-FHA roster appraiser is thoroughly familiar with HUD Handbooks
    4905.1 and 4150.2.

Remember that you are responsible for the acts of your agents which
include appraisers. See AN No 4260 dated 3/29/07, Existing Dwelling
Inspection Requirements; Acceptable Origination Appraisal Forms, for
additional information.

We have received several questions regarding areas labeled as a
declining market. This does not apply to the Rural Development
guaranteed program and 100 percent financing still is acceptable in
these areas.

###  REFINANCING

Inquiries regarding refinancing are increasing. A guaranteed loan may be
used to refinance either a Rural Development guaranteed or direct
single-family housing loan. No other debts can be refinanced and no cash
out is allowed. Any existing secondary financing must be subordinate to
the new first lien.

The guarantee fee is .5 percent. The maximum loan amount cannot exceed
the balance of the loan being refinanced, the guarantee fee and closing
costs. If refinancing only the principal balance and the guarantee fee,
no new appraisal is needed. If the new loan amount includes interest or
any other closing costs, a new appraisal is required.

For additional information, see AN No 4336 for refinancing guaranteed
loans or AN No 4335 for refinancing direct loans. Both are dated 2/28/08
and are updates of previous AN's. Slight changes have been made to both
to remove references to Form AD-1048 and also to remove the provision
that only refinancing transactions can exceed 100% of the appraised
value.

###  DOTTIE RETIRES

After 26 years of dedicated government service, Dottie Sutton has
retired. Her last day was Feb. 1. We all congratulate Dottie and wish
her many happy, healthy, relaxing and enjoyable days!

### ADMINISTRATION NOTICES (ANs)

**AN No 4330, Guaranteed Underwriting System (GUS) dated 1/30/08
replaces AN 4273.**

**RD Instruction 1980-D and all ANs can be found at:
<http://www.rurdev.usda.gov/regs/regs_toc.html#1980>**

**[Following is a listing of all current ANs. Any ANs not listed here
can be disposed of]{.underline}**: [AN
4237](http://www.rurdev.usda.gov/regs/an/an4237.pdf); [AN
4257](http://www.rurdev.usda.gov/regs/an/an4257.pdf); [AN
4258](http://www.rurdev.usda.gov/regs/an/an4258.pdf); [AN
4259](http://www.rurdev.usda.gov/regs/an/an4259.pdf); [AN
4260](http://www.rurdev.usda.gov/regs/an/an4260.pdf); [AN
4262](http://www.rurdev.usda.gov/regs/an/an4262.pdf); [AN
4263;](http://www.rurdev.usda.gov/regs/an/an4263.pdf) [AN
4266](http://www.rurdev.usda.gov/regs/an/an4266.pdf); [AN
4268](http://www.rurdev.usda.gov/regs/an/an4268.pdf); [AN
4269](http://www.rurdev.usda.gov/regs/an/an4269.pdf); [AN
4273](http://www.rurdev.usda.gov/regs/an/an4273.pdf); [AN
4278](http://www.rurdev.usda.gov/regs/an/an4278.pdf); [AN
4287]{.underline}; [AN 4293]{.underline}; [AN 4300]{.underline}; [AN
4302]{.underline}; [AN 4303]{.underline}; [AN 4305]{.underline}; [AN
4307]{.underline}; [AN 4313]{.underline}; [AN 4314]{.underline}; [AN
4320]{.underline}; [AN 4321]{.underline}; [AN 4326]{.underline}; [AN
4330]{.underline}; [AN 4335]{.underline}; [AN 4336]{.underline}; [AN
4337]{.underline}.

### GENERAL INFO

1.  Subscribe to the RD ListServ to obtain the latest information on GRH
    loan origination, servicing and GUS news. Provide your email address
    to:
    [www.rdlist.sc.egov.usda.gov/](http://www.rdlist.sc.egov.usda.gov/).

2.  Bookmark as a favorite the property and income eligibility website:

<http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do>

3.  GUS Lender training is available on USDA Linc:
    <https://usdalinc.sc.egov.usda.gov/>

-   Select "RHS LINC"

-   Under "SFH Guaranteed Rural Housing", Select "Training & Resource
    Library"

-   Under "GUS" scroll to select "GUS Lender Overview and Training"

4.  MN contacts for guaranteed housing loans

> Specialists:
>
> Patti Berry 651-602-7807 <patti.berry@mn.usda.gov>
>
> Peter Lundquist 651-602-7782 <peter.lundquist@mn.usda.gov>
>
> Linda Behrendt 651-602-7797 <linda.behrendt@mn.usda.gov>
>
> Greg Nelson 651-602-7798 <gregory.nelson@mn.usda.gov>
>
> Technicians:
>
> Marlene Smith 651-602-7795 <marlene.smith@mn.usda.gov>
>
> Tanya Roberts 651-602-7794 <tanya.roberts@mn.usda.gov>
>
> Fax number: 651-602-7825
>
> **[REVISED INCOME LIMITS EFFECTIVE 3/19/08 ARE ATTACHED]{.underline}**

![](media/image3.wmf)*USDA, Rural Development is an Equal Opportunity
Lender, Provider and Employer. Complaints of discrimination should be
sent to: USDA, Director, Office of Civil Rights, Washington, D.C,
20250-9410*