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| USDA Rural Development                                                |
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| 410 AgriBank Bldg., 375 Jackson St.                                   |
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| St. Paul, MN 55101-1853                                               |
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| St Paul (651) 602-7807 or (651)602-7797                               |
|                                                                       |
| North Branch (651) 674-7051 Willmar (320) 235-5612                    |
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| ![](media/image1.wmf){width="2.3229166666666665in"                    |
| height="1.5097222222222222in"}                                        |
| ![](media/image2.jpeg){width="1.6590277777777778in"                   |
| height="0.9215277777777777in"}                                        |
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# June 1, 2005

### JUNE IS HOMEOWNERSHIP MONTH

We are celebrating Homeownership Month throughout the month of June here
at USDA Rural Development. Lance Larson, Single-Family Housing Program
Director in Minnesota, wishes to offer the following message:

"Homeownership is the cornerstone of the American Dream. It provides
security for children, upward mobility for families, stabilizes
neighborhoods and creates stronger communities. We are working to
achieve President Bush's homeownership initiatives, including increasing
homeownership among minority groups and adding seven million affordable
homes to the market in the next 10 years. USDA Rural Development has
been committed to homeownership for over 70 years. We could not have
achieved as much as we have without you, our partners. We appreciate the
work that you do in promoting our programs, and working with us to
improve the quality of life in our rural communities."

### CREDIT PACKAGE SUBMISSION INFO

1)  Form 1980-21, "Request for Single Family Housing Loan Guarantee" was
    revised in January 2003. The revision to this form included the
    addition of language regarding the Debt Collection Improvement Act
    (DCIA). We continue to receive partially completed forms. It is
    pertinent that this form be fully completed this includes the loan
    amount, interest rate, debt ratios, etc. the completion of the form
    will be a condition on the commitment. If the loan amounts change
    after submission, it will be the responsibility of the lender to
    update the Form 1980-21 accordingly and obtain the borrower's
    original signature(s) for Rural Development.

2)  Form 410-9, "Privacy Act Information" is no longer required. The
    information from this form has been implemented into Form 1980-21.

3)  When completing Form 1003 & 1008 please include the borrower's
    current rent payment amount. Rural Development must determine the
    borrower's potential payment shock.

4)  Form 1980-86, "Request for Reservation of Funds" should be faxed
    when an applicant has a signed purchase agreement. Please fax Form
    1980-86, the application (handwritten or typed) and [only the first
    page]{.underline} of the purchase agreement to the respective
    office.

### FUNDING UPDATE

Minnesota is steadily increasing its fund usage. The State's volume has
increased by \$25,175,070 since April 30, 2005! This means 227 families
have purchased homes within 30 days! Keep up the terrific work!

Minnesota is lagging behind last year's usage by 3.17% this compares to
an 11.95% national lag. According to National Office projections we
should have sufficient funding for the remaining of our Fiscal Year.

See the attached map for county activity.

### ADMINISTRATIVE NOTICES (ANs)

**RD AN 4054** issued on February 28, 2005 replaces RD AN 3934. This AN
allows lenders to use URAR Form 70/1004; Fannie Mae Form 2055; Freddie
Mac Form 2055 and Condominium Report Forms 1073 or 465. Lenders are to
remind appraisers that they must always include the estimated site value
as well as the remaining economic life of the property. Newly
constructed properties do not require the completion of the HUD VC
sheets or RD thermal report but must meet the requirements of RD AN
4011.

**RD AN 4067** was issued on April 1, 2005 to replace RD AN 3948, this
AN allows the use of credit scores to streamline credit history
documentation.

**RD AN 4068** issued April 1, 2005 replaces RD AN 3067. Changes that
were implemented include the need for a minimum of 2 credit repository
reports on an in-file credit report and the use of local
stores/businesses as possible non-traditional credit references.

**RD AN 4069** issued April 1, 2005 replaces RD AN 3950. The AN changed
the section pertaining to the analysis of Federal Income Tax Form 1040,
Schedule C. Interest deductions from Schedule C should no longer be
added back to gross business income. Depletion and depreciation may
continue to be added back. The past two year Federal tax returns
including schedules are required along with a current business income
and expense statement. Any debt payments paid through the business need
to be document by showing 12 months history of the business paying such
debts before the debt can be excluded from ratios.

**RD AN 4070** also issued on April 1, 2005 replaced RD AN 3949
regarding using alt-docs to verify the applicant's employment income.
Remember that Rural Development always requires the applicant's most
recent paycheck stub with any type of verification.

**RD AN 4080** issued on May 6, 2005 replaces RN AN 3970. This AN
clarifies the handling of collection accounts with outstanding balances.

**RD AN 4081** was issued on May 4, 2005. This AN clarifies Rural
Developments condominium requirements and how to determine if the
condominium has been approved or accepted by HUD, VA, FNMA or FHLMC.
There has been no prior AN on this subject.

The following is a list of current ANs.

**1980-D** Rural Housing Loans; [AN
4000](http://www.rurdev.usda.gov/regs/an/an4000.pdf); [AN
4011](http://www.rurdev.usda.gov/regs/an/an4011.pdf); [AN
4019](http://www.rurdev.usda.gov/regs/an/an4019.pdf); [AN
4025](http://www.rurdev.usda.gov/regs/an/an4025.pdf); [AN
4026](http://www.rurdev.usda.gov/regs/an/an4026.pdf); [AN
4027](http://www.rurdev.usda.gov/regs/an/an4027.pdf); [AN
4042](http://www.rurdev.usda.gov/regs/an/an4042.pdf); [AN
4048](http://www.rurdev.usda.gov/regs/an/an4048.pdf); [AN
4049](http://www.rurdev.usda.gov/regs/an/an4049.pdf); [AN
4051](http://www.rurdev.usda.gov/regs/an/an4051.pdf); [AN
4052](http://www.rurdev.usda.gov/regs/an/an4052.pdf); [AN
4053](http://www.rurdev.usda.gov/regs/an/an4053.pdf), [AN
4054](http://www.rurdev.usda.gov/regs/an/an4054.pdf); [AN
4061;](http://www.rurdev.usda.gov/regs/an/an4061.pdf) [AN
4067](http://www.rurdev.usda.gov/regs/an/an4067.pdf); [AN
4068](http://www.rurdev.usda.gov/regs/an/an4068.pdf); [AN
4069;](http://www.rurdev.usda.gov/regs/an/an4069.pdf) [AN
4070](http://www.rurdev.usda.gov/regs/an/an4070.pdf); [AN
4078](http://www.rurdev.usda.gov/regs/an/an4078.pdf); [AN
4080](http://www.rurdev.usda.gov/regs/an/an4080.pdf); [AN
4081](http://www.rurdev.usda.gov/regs/an/an4081.pdf)

### MISCELLANEOUS ITEMS

1.  Our web site is:
    [www.rurdev.usda.gov/mn](http://www.rurdev.usda.gov/mn). Forms and
    regulations can be searched by clicking on "regulations." We are
    always trying to improve the website to better serve our partners
    and our customers. We encourage you to give feedback on how we can
    improve our website to better serve your needs**[.]{.underline}**

2.  Guaranteed Housing Specialist phone numbers: Kim Bailey --
    (320)235-5612 x 129; Linda Behrendt -- (651)674-7051 x 112; Patti
    Berry -- (651)602-7807; Dottie Sutton -- (320)235-5612 x 125; Dennis
    Tabbert -- (651)602-7797. Adam Czech (Public Information
    Coordinator) 651-602-7799.

![](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*