[Federal Register Volume 89, Number 182 (Thursday, September 19, 2024)]
[Proposed Rules]
[Pages 76745-76749]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-21404]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 89, No. 182 / Thursday, September 19, 2024 / 
Proposed Rules

[[Page 76745]]



DEPARTMENT OF AGRICULTURE

Rural Housing Service

7 CFR Part 3555

[Docket No. RHS-24-SFH-0029]
RIN 0575-AD38


Single Family Housing Guaranteed Loan Program

AGENCY: Rural Housing Service, Agriculture Department (USDA).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Rural Housing Service (RHS or Agency), a Rural Development 
agency of the United States Department of Agriculture (USDA), proposes 
to amend the current Single Family Housing Guaranteed Loan Program 
(SFHGLP) regulation to change the requirements for the length of time a 
prior Agency loss is considered significant derogatory credit and 
address seasoning requirements and payment performance for refinance 
transactions. This proposed rule intends to establish a seven-year time 
frame for the applicant to re-establish credit after a prior loss claim 
with the Agency before that loss would no longer be considered 
significant derogatory credit. This proposed rule also intends to 
clarify the seasoning requirements and expected payment history 
requirements for all three refinance submission types within the SFHGLP 
and identify when applicants are eligible to refinance their current 
mortgage.

DATES: Comments must be submitted on or before November 18, 2024.

ADDRESSES: Comments may be submitted electronically, only by using the 
Federal eRulemaking Portal: Go to https://www.regulations.gov and in 
the ``Search for dockets and documents on agency actions'' box, enter 
the following docket number: (RHS-24-SFH-0029). To submit or view 
public comments, click ``Search'' button, select the ``Documents'' tab, 
then select the following document title: (Single Family Housing 
Guaranteed Loan Program) from the ``Search Results'' and select the 
``Comment'' button. Before submitting your comments, you may also 
review the ``Commenter's Checklist'' (optional). Insert your comments 
under the ``Comment'' title, click ``Browse'' to attach files (if 
available). Input your email address and select ``Submit Comment.'' 
Information on using Regulations.gov, including instructions for 
accessing documents, submitting comments, and viewing the docket after 
the close of the comment period, is available through the site's 
``FAQ'' link.
    Other Information: Additional information about Rural Development 
and its programs is available on the internet at https://www.rd.usda.gov.
    All comments will be available for public inspection online at the 
Federal eRulemaking Portal (https://www.regulations.gov).
    In accordance with 5 U.S.C. 553(b)(4), a summary of this proposed 
rule may be found by going to https://www.regulations.gov and in the 
``Search for dockets and documents on agency actions'' box, enter the 
following docket number RHS-24-SFH-0029.

FOR FURTHER INFORMATION CONTACT: Laurie Mohr, Finance and Loan Analyst, 
Single Family Housing Guaranteed Loan Division, Rural Development, U.S. 
Department of Agriculture, STOP 0784, Room 2250, South Agriculture 
Building, 1400 Independence Avenue SW, Washington, DC 20250-0784. 
Telephone: (314) 679-6917; or email: <a href="/cdn-cgi/l/email-protection#234f4256514a460d4e4c4b5163565047420d444c55"><span class="__cf_email__" data-cfemail="82eee3f7f0ebe7acefedeaf0c2f7f1e6e3ace5edf4">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Abbreviations

CAIVRS Credit Alert Verification Reporting System
CFR Code of Federal Regulations
et seq. et sequentes
FHA Federal Housing Administration
FR Federal Register
HB-3555 Handbook 3555
HUD Department of Housing and Urban Development
RHS Rural Housing Service
Sec.  Section
U.S.C. United States Code

I. Statutory Authority

    SFHGLP is authorized at Section 502(h) of Title V of the Housing 
Act of 1949 (42 U.S.C. 1472(h)) and implemented by 7 CFR part 3555.

II. Background

    RHS offers a variety of programs to build or improve housing and 
essential community facilities in rural areas. RHS offers loans, 
grants, and loan guarantees for single and multi-family housing, 
childcare centers, fire and police stations, hospitals, libraries, 
nursing homes, schools, first responder vehicles and equipment, housing 
for farm laborers and much more. RHS also provides technical assistance 
loans and grants in partnership with non-profit organizations, Indian 
tribes, State and Federal Government agencies, and local communities.
    Under the authority of the Housing Act of 1949, (42 U.S.C. 1471 et 
seq.), as amended, the SFHGLP makes loan guarantees to provide low- and 
moderate-income persons in rural areas an opportunity to own decent, 
safe, and sanitary dwellings and related facilities. Approved lenders 
make the initial eligibility determinations, and the Agency reviews 
those determinations to make a final eligibility decision.
    This program helps lenders work with low- and moderate-income 
households living in rural areas to make homeownership a reality. 
Providing affordable homeownership opportunities promotes prosperity, 
which in turn creates thriving communities and improves the quality of 
life in rural areas.

III. Discussion of the Proposed Rule

A. Significant Derogatory Credit Proposed Rule Changes

    Currently, an applicant with an indicator of significant derogatory 
credit requires a lender to conduct further review and to document that 
review during the underwriting process. As specified in 7 CFR 
3555,151(i)(3)(iv), one indicator of significant derogatory credit is a 
previous Agency loan made to the applicant that resulted in a loss to 
the Government. A loss claim on a SFHGLP or a Single Family Housing 
Direct Loan results in a loss to the federal government. Therefore, an 
applicant with a previous loss claim is considered to have an indicator 
of significant derogatory credit.
    Applicants obtaining a guarantee through the SFHGLP must obtain a 
clear Credit Alert Verification Reporting System (CAIVRS) number, which 
checks for prior loss claims by reviewing any delinquent and/or 
defaulted claims that were paid on the applicant's behalf. Currently, 
regardless of the time passed since a loss to the

[[Page 76746]]

Agency occurred, applicants must maintain a clear CAIVRS number to 
obtain a new loan with the SFHGLP.
    This proposed rule intends to amend 7 CFR 3555.151(i)(3)(iv) to 
establish a time limit for how long a previous Agency loss will be 
considered significant derogatory credit. The Agency proposes that this 
time limit be seven years. This would mean that any loss claim that is 
older than seven years old would no longer be considered significant 
derogatory credit for an applicant applying for a new loan using the 
SFHGLP.
    This proposed rule would better align the waiting period with those 
used by similar programs. The Veterans Administration (VA) and the 
Federal Housing Administration (FHA), part of the U.S. Department of 
Housing and Urban Development, have shorter waiting periods before 
applicants are eligible to participate in their mortgage loan programs 
after having a foreclosure. VA allows applicants to apply for a 
mortgage as early as two years after a previous foreclosure, with FHA 
having a three-year waiting period. While a previous loss claim is a 
significant event when it occurs, applicants can establish positive 
repayment ability over time through various means, such as building 
credit; obtaining better paying jobs; demonstrating growth of liquid 
assets; and positioning themselves to be eligible for homeownership 
through the SFHGLP. Currently, 7 CFR 3555.151(i)(3) requires that for 
manually underwritten loans, lenders must submit documentation of the 
credit qualification decision. Lenders use credit scores to manually 
underwrite loan mortgage requests and are required to validate the 
credit scores utilized in the underwriting determination. Indicators of 
significant derogatory credit require further review and documentation 
of that review and a previous Agency loan that resulted in a loss to 
the government is one item that would require this type of more 
thorough underwriting review and documentation.
    When the loan file becomes a manually underwritten loan, the lender 
is required to submit a fully documented file for the Agency to review. 
Some of the guidelines for a manually underwritten file are more 
stringent and require the lender to provide acceptable debt ratio 
waivers and compensating factors to support these waivers, as well as 
require credit score validations, credit exceptions, and a verification 
of rent. In cases where applicants have re-established credit, obtained 
a stable and dependable earning stream, and generated savings it seems 
prudent to add a time frame for when the Agency considers these 
previous loss claims to no longer be considered significant derogatory 
credit.
    The Agency proposes a seven-year period for consideration of 
previous loss claims to be considered significant derogatory credit.
    To reach this figure of seven-years, the Agency considered that 
many states utilize a seven-year statute of limitation for creditor 
claims. The Agency also considered provisions in the Fair Credit 
Reporting Act (FCRA), 15 U.S.C. 1681 et seq., which is a federal law 
that regulates the collection, accuracy, and privacy of consumers' 
credit information. One of the provisions of FCRA is a requirement to 
exclude from credit reports most types of derogatory credit that 
antedate the report by more than seven years.
    When evaluating the overall applicants' credit worthiness, lenders 
consider a variety of factors, including the applicant's income, 
assets, credit rating, and proposed collateral.
    The Agency determined that seven-years is sufficient time for an 
improvement in these factors. For example, in seven years, an applicant 
may have significantly increased their income by obtaining a job 
promotions, raise, completing a degree, learning a new trade, obtaining 
a new skill, credential, or similar development. to validate 
circumstances have changed. Having a greater potential repayment 
ability, or increased capacity, to make the loan payments for the 30-
year term is important in the applicants' underwriting analysis.
    The Agency also determined that seven years is sufficient time for 
the applicant to further develop their financial state, by obtaining 
additional assets and reducing their liabilities. Comparing their 
assets to liabilities helps determine if the applicant can sustain 
their current financial situation and, more importantly, if a hardship 
arose, whether they have sufficient reserves to ensure continued 
repayment. In conjunction with having time to obtain a better job, this 
would allow additional time for the applicant to increase their 
savings. In the seven-year time frame, the applicant may be eligible to 
receive matching funds by the employer in their 401K or 457 plan, or 
possibly receive increased wages enabling them to put more away in 
savings. This would be important for the cash assets and reserves 
available in the applicants' underwriting analysis.
    The last item the Agency considered in determining the seven-year 
period was credit. A time frame had to be established that allowed the 
applicant time to repair their credit. In a seven-year time frame the 
applicant would have time to repair or rebuild their credit score, pay 
down or pay off debts, and improve their overall credit situation, and 
credit reporting companies would no longer report many indicators of 
derogatory credit seven years after their occurrence. By having 
sufficient time to re-establish credit, the applicants can show 
enhanced repayment ability to the potential lender. The Agency believes 
that by basing the seven-year time frame on both regulatory credit 
reporting rules and a fair time frame for the applicants to be able to 
re-establish themselves, the applicants can gain better employment, 
obtain more wealth, and eradicate a previously tarnished credit report 
in the seven years. Thus, using a seven-year time frame to consider a 
prior loss claim to be significant derogatory credit is well supported.

B. Refinance Seasoning and Payment Performance Proposed Rule Changes

    There are three refinance options available to borrowers through 
SFHGLP--streamlined, non-streamlined, and streamline-assist.
    Currently, 7 CFR part 3555 does not have a seasoning requirement 
for streamlined or non-streamlined refinance loans. The ``seasoning'' 
period for a mortgage loan refers to the amount of time the applicants 
have had their mortgage loan and made payments on the debt to their 
servicer. This proposed rule intends to modify the existing seasoning 
requirements for streamlined or non-streamlined refinance loans.
    The streamlined-assist refinance loan currently has a 12-month 
seasoning requirement, which this proposed rule would modify to a six-
month seasoning requirement. Other Federal Agencies offering similar 
programs, both requiring limited borrower credit and underwriting 
documentation, such as FHA and VA, allow streamline refinance 
transactions after a six-month time span. This proposed rule would 
bring consistency with these Agencies by permitting the current loan to 
only be seasoned six months prior to being eligible for a refinance.
    The proposed rule would amend Sec.  3555.101(d)(3)(i) to clarify 
there is no seasoning requirement for the streamlined or non-
streamlined refinance loans. Additionally, the current 12-month 
seasoning requirement for streamlined-assist loans would be modified to 
a six-month seasoning requirement. The revision would also clarify the 
mortgage payment history must not reflect any

[[Page 76747]]

delinquencies greater than 30 days within 180 days prior to loan 
application. Since the streamlined and non-streamlined refinance loans 
are not required to be seasoned for 180 days at loan application, the 
current loan being refinanced cannot have any delinquencies greater 
than 30 days since the mortgage loan was originated to be eligible.
    This proposal intends to provide our low- to moderate-income 
applicants the ability to take advantage of a more favorable mortgage 
interest rate earlier, promoting repayment ability, and allowing them 
more funds available to save for future expenditures or make home 
improvements.
    The proposed rule would require all payments on the current 
mortgage loan to be made on time for the last 180 days prior to loan 
application for all three refinance types (streamlined, non-
streamlined, and streamlined assist). No delinquencies greater than 30 
days may occur in that period. These proposed guidelines mirror other 
Federal Agency guidelines, as payments are required to be paid on time 
for six consecutive months. Since the streamlined and non-streamlined 
refinance options do not require a seasoning period, when the 
borrowers' current mortgage account has not been open 180 days prior to 
the refinance loan application, no defaults can be present since the 
current mortgage account was originated.
    The proposed rule also intends to update 7 CFR 3555.101(d)(3)(iii) 
by clarifying that existing borrowers seeking to refinance with the 
streamlined, non-streamlined, and streamlined-assist products must 
maintain a current mortgage account for 180 days prior to loan 
application. It will also further explain if borrowers are using the 
streamlined or non-streamlined refinance options and the mortgage 
account has not been open 180 days prior to loan application, no 
defaults can be present since the mortgage account was opened.
    Finally, the proposed rule would amend 7 CFR 3555.101(d)(3)(vi) to 
delete duplicate information already contained within other provisions 
of subsection (d). The paragraph will instead state: Documentation, 
costs, underwriting, and servicing requirements of subparts D, E, and F 
of this part apply to refinancing, unless otherwise provided by the 
Agency.

IV. Request for Comment

    Stakeholder input is vital to ensure the proposed changes in the 
proposed rule would support the Agency's mission, while ensuring that 
new regulations and policies are reasonable and do not overly burden 
the Agency's lenders and their customers. Comments must be submitted on 
or before November 18, 2024 and may be submitted electronically by 
going to the Federal eRulemaking Portal: https://www.regulations.gov. 
Details on how to submit comments to the Federal eRulemaking Portal are 
in the ADDRESSES section of this proposed rule.

V. Summary of Proposed Rule Changes

    RHS is proposing to make the following changes to 7 CFR 3555:
    (1) The Agency is proposing to amend 7 CFR 3555.101(d)(3)(i)(A) to 
state that lenders may offer a streamlined refinance for existing 
Section 502 Guarantee loans, which does not require a new appraisal. 
The lender will pay off the balance of the existing Section 502 
Guaranteed loan. There is no seasoning requirement for the current 
mortgage account being refinanced. The borrower must have no 
delinquencies greater than 30 days on the mortgage account being 
refinanced for 180 days prior to loan application. If the current 
mortgage loan is not 180 days mature at loan application, the borrower 
cannot have any delinquencies greater than 30 days since the mortgage 
loan was originated.
    (2) The Agency also proposes to update Sec.  3555.101(d)(3)(i)(B) 
to allow lenders to offer non-streamlined refinancing for existing 
Section 502 Guaranteed or Direct loans, which requires a new and 
current market value appraisal. The amount of the new loan must be 
supported by sufficient equity in the property determined by an 
appraisal. The appraised value may be exceeded by the amount of up-
front guarantee fee financed, if any, when using the non-streamlined 
option. There is no seasoning requirement for the current mortgage 
account being refinanced. The borrower must have no delinquencies 
greater than 30 days on the mortgage account being refinanced for 180 
days prior to loan application. If the current mortgage loan is not 180 
days mature at loan application; the borrower cannot have any 
delinquencies greater than 30 days since the mortgage loan was 
originated.
    (3) The Agency is also proposing to update Sec.  
3555.101(d)(3)(i)(C) to make clear that a streamlined-assist refinance 
loan is a special refinance option available to existing Section 502 
Direct and Guaranteed loan borrowers. There are no debt-to-income 
calculation requirements, no credit report requirements, no property 
inspection requirements, and no loan-to-value requirements. There is no 
appraisal requirement, with the exception of Section 502 Direct loan 
borrowers who have received a subsidy. The existing loan must have 
closed six months prior to loan application. Applicants must meet the 
income eligibility requirements of Sec.  3555.151(a) and must not have 
had any delinquencies greater than 30 days on their mortgage account 
being refinanced 180 days prior to loan application.
    (4) The proposed rule intends to update 7 CFR 3555.101(d)(3)(iii) 
to clarify existing borrowers seeking to refinance with the 
streamlined, non-streamlined, and the streamlined-assist products must 
maintain a current mortgage account for 180 days prior to loan 
application. It will also stipulate if borrowers are using the 
streamlined or non-streamlined refinance options and the mortgage 
account has not been open 180 days prior to loan application, no 
defaults can be present since the mortgage account was opened.
    (5) The proposed rule would amend 7 CFR 3555.101(d)(3)(vi) to 
delete text that is already provided in section (d) of 7 CFR 3555. The 
paragraph will state: Documentation, costs, and underwriting 
requirements of subparts D, E, and F of this part apply to refinances, 
unless otherwise provided by the Agency.
    (6) The Agency intends to revise 7 CFR 3555.151(i)(3)(iv) to 
specify a previous Agency loan that resulted in a loss to the 
Government within the last seven years is considered significant 
derogatory credit.

VI. Regulatory Information

Executive Order 12372, Intergovernmental Review of Federal Programs

    This program is not subject to the requirements of Executive Order 
12372, ``Intergovernmental Review of Federal Programs,'' as implemented 
under USDA's regulations at 2 CFR 415, subpart C.

Executive Order 12866 and 13563

    Executive Orders 12866 (Regulatory Planning and Review) and 13563 
(Improving Regulation and Regulatory Review) direct agencies to assess 
the costs and benefits of available regulatory alternatives and, if a 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and promoting 
flexibility. This proposed rule has been designated a ``non-significant 
regulatory action,''

[[Page 76748]]

under section 3(f) of Executive Order 12866. Accordingly, the rule has 
not been reviewed by the Office of Management and Budget (OMB).
    In accordance with Executive Order 12866, a Regulatory Impact 
Analysis was not completed.

Executive Order 12988, Civil Justice Reform

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Except where specified, all state and local laws 
and regulations that are in direct conflict with this rule will be 
preempted. Federal funds carry federal requirements. No person is 
required to apply for funding under SFHGLP, but if they do apply and 
are selected for funding, they must comply with the requirements 
applicable to the federal program funds. This rule is not retroactive. 
It will not affect agreements entered into prior to the effective date 
of the rule. Before any judicial action may be brought regarding the 
provisions of this rule, the administrative appeal provisions of 7 CFR 
part 11 must be exhausted.

Executive Order 13132, Federalism

    The policies contained in this proposed rule do not have any 
substantial direct effect on states, on the relationship between the 
national government and states, or on the distribution of power and 
responsibilities among the various levels of government. This proposed 
rule does not impose substantial direct compliance costs on state and 
local governments. Therefore, consultation with the states is not 
required.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    This proposed rule has been reviewed in accordance with the 
requirements of Executive Order 13175, ``Consultation and Coordination 
with Indian Tribal Governments.'' Executive Order 13175 requires 
Federal agencies to consult and coordinate with tribes on a government-
to-government basis on policies that have Tribal implications, 
including regulations, legislative comments or proposed legislation, 
and other policy statements or actions that have substantial direct 
effects on one or more Indian Tribes, on the relationship between the 
Federal Government and Indian Tribes or on the distribution of power 
and responsibilities between the Federal Government and Indian Tribes. 
Consultation is also required for any regulation that preempts Tribal 
law or that imposes substantial direct compliance costs on Indian 
Tribal governments and that is not required by statute. The Agency has 
determined that this proposed rule does not, to our knowledge, have 
Tribal implications that require formal Tribal consultation under 
Executive Order 13175. If a Tribe requests consultation, the Rural 
Housing Service will work with the Office of Tribal Relations to ensure 
meaningful consultation is provided where changes, additions and 
modifications identified herein are not expressly mandated by Congress.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for federal agencies to assess the 
effect of their regulatory actions on state, local, and tribal 
governments, and the private sector. Under section 202 of the UMRA, the 
Agency generally must prepare a written statement, including a cost-
benefit analysis, for proposed and final rules with ``federal 
mandates'' that may result in expenditures to state, local, or tribal 
governments, in the aggregate, or to the private sector, of $100 
million, or more in any one year. When such a statement is needed for a 
rule, section 205 of the UMRA generally requires the Agency to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective, or least burdensome alternative 
that achieves the objectives of the rule.
    This proposed rule contains no federal mandates (under the 
regulatory provisions of Title II of the UMRA) for state, local, and 
tribal governments, or the private sector. Therefore, this rule is not 
subject to the requirements of sections 202 and 205 of the UMRA.

National Environmental Policy Act

    In accordance with the National Environmental Policy Act of 1969, 
Public Law 91-190, this final rule has been reviewed in accordance with 
7 CFR part 1970 (``Environmental Policies and Procedures''). The Agency 
has determined that i) this action meets the criteria established in 7 
CFR 1970.53(f); ii) no extraordinary circumstances exist; and iii) the 
action is not ``connected'' to other actions with potentially 
significant impacts, is not considered a ``cumulative action'' and is 
not precluded by 40 CFR 1506.1. Therefore, the Agency has determined 
that the action does not have a significant effect on the human 
environment, and therefore neither an Environmental Assessment nor an 
Environmental Impact Statement is required.

Regulatory Flexibility Act

    This proposed rule has been reviewed with regard to the 
requirements of the Regulatory Flexibility Act (5 U.S.C. 601-612). The 
undersigned has determined and certified by signature on this document 
that this rule will not have a significant economic impact on a 
substantial number of small entities since this rulemaking action does 
not involve a new or expanded program nor does it require any more 
action on the part of a small business than required of a large entity.

Civil Rights Impact Analysis

    RD has reviewed this proposed rule in accordance with USDA 
Regulation 4300-4, Civil Rights Impact Analysis,'' to identify any 
major civil rights impacts the rule might have on program participants 
on the basis of age, race, color, national origin, sex, disability, 
gender identity (including gender expression), genetic information, 
political beliefs, sexual orientation, marital status, familial status, 
parental status, veteran status, religion, reprisal and/or resulting 
from all or a part of an individual's income being derived from any 
public assistance program. This proposed rule is within a Guarantee-
based program. Guarantees are not covered under Title VI of the Civil 
Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, and 
Title IX of the Education Amendments Act of 1972, as amended, when the 
Federal assistance does not include insurance or interest credit loans. 
Lenders must comply with other applicable Federal laws, including Equal 
Employment Opportunities, the Equal Credit Opportunity Act, the Fair 
Housing Act, and the Civil Rights Act of 1964. Guaranteed loans that 
involve the construction of or addition to facilities that accommodate 
the public must comply with the Architectural Barriers Act 
Accessibility Standard. The borrower and lender are responsible for 
ensuring compliance with these requirements.

Programs Affected

    The program affected by this proposed rule is listed in the 
Assistance Listing (AL) Number 10.410, Very Low to Moderate Income 
Housing Loans (Section 502 Rural Housing Loans).

Paperwork Reduction Act

    This proposed rule contains no new reporting or recordkeeping 
burdens under OMB control number 0575-0179 that would require approval 
under the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).

[[Page 76749]]

E-Government Act Compliance

    Rural Development is committed to the E-Government Act, which 
requires Government agencies in general to provide the public the 
option of submitting information or transacting business electronically 
to the maximum extent possible.

Non-Discrimination Policy

    In accordance with Federal civil rights laws and U.S. Department of 
Agriculture (USDA) civil rights regulations and policies, the USDA, its 
Mission Areas, agencies, staff offices, employees, and institutions 
participating in or administering USDA programs are prohibited from 
discriminating based on race, color, national origin, religion, sex, 
gender identity (including gender expression), sexual orientation, 
disability, age, marital status, family/parental status, income derived 
from a public assistance program, political beliefs, or reprisal or 
retaliation for prior civil rights activity, in any program or activity 
conducted or funded by USDA (not all bases apply to all programs). 
Remedies and complaint filing deadlines vary by program or incident.
    Program information may be made available in languages other than 
English. Persons with disabilities who require alternative means of 
communication to obtain program information (e.g., Braille, large 
print, audiotape, American Sign Language) should contact the 
responsible Mission Area, agency, staff office; or the 711 Federal 
Relay Service.
    To file a program discrimination complaint, a complainant should 
complete a Form AD-3027, USDA Program Discrimination Complaint Form, 
which can be obtained online, from any USDA office, by calling (866) 
632-9992, or by writing a letter addressed to USDA. The letter must 
contain the complainant's name, address, telephone number, and a 
written description of the alleged discriminatory action in sufficient 
detail to inform the Assistant Secretary for Civil Rights (ASCR) about 
the nature and date of an alleged civil rights violation. The completed 
AD-3027 form or letter must be submitted to USDA by:
    (1) Mail: U.S. Department of Agriculture, Office of the Assistant 
Secretary for Civil Rights, 1400 Independence Avenue SW, STOP 9410, 
Washington, DC 20250-9410; or
    (2) Fax: (833) 256-1665 or (202) 690-7442; or
    (3) Email: <a href="/cdn-cgi/l/email-protection#39494b565e4b58541750574d58525c794c4a5d58175e564f"><span class="__cf_email__" data-cfemail="48383a272f3a29256621263c29232d083d3b2c29662f273e">[email protected]</span></a>.
    USDA is an equal opportunity provider, employer, and lender.

List of Subjects in 7 CFR Part 3555

    Administrative practice and procedure, Business and industry, 
Conflicts of interest, Credit, Environmental impact statements, Fair 
housing, Flood insurance, Grant programs--housing and community 
development, home improvement, Housing, Loan programs--housing and 
community development, Low and moderate income housing, Manufactured 
homes, Mortgage insurance, Mortgages, Reporting and recordkeeping 
requirements, Rural areas.

    For the reasons discussed in the preamble, the Agency is proposing 
to amend 7 CFR part 3555 as follows:

PART 3555--GUARANTEED RURAL HOUSING PROGRAM

0
1. The authority citation for Part 3555 continues to read as follows:

    Authority:  5 U.S.C. 301; 42 U.S.C. 1471 et seq.

0
2. Amend Sec.  3555.101 by revising paragraphs (d)(3)(i)(A) through (C) 
and (d)(3)(iii) and (vi) to read as follows:


Sec.  3555.101  Loan purposes.

* * * * *
    (d) * * *
    (3) * * *
    (i) * * *
    (A) Lenders may offer streamlined refinancing for existing Section 
502 Guaranteed loans, which does not require a new appraisal. The 
lender will pay off the balance of the existing Section 502 Guaranteed 
loan. There is no seasoning requirement for the current mortgage 
account being refinanced. The borrower must have no delinquencies 
greater than 30 days on the mortgage account being refinanced for 180 
days prior to loan application. If the current mortgage loan is not 180 
days mature at loan application, the borrower cannot have any 
delinquencies greater than 30 days since the mortgage loan was 
originated.
    (B) Lenders may offer non-streamlined refinancing for existing 
Section 502 Guaranteed or Direct loans, which requires a new and 
current market value appraisal. The amount of the new loan must be 
supported by sufficient equity in the property as determined by an 
appraisal. The appraised value may be exceeded by the amount of up-
front guarantee fee financed, if any, when using the non-streamlined 
option. There is no seasoning requirement for the current mortgage 
account being refinanced. The borrower must have no delinquencies 
greater than 30 days on the mortgage account being refinanced for 180 
days prior to loan application. If the current mortgage loan is not 180 
days mature at loan application, the borrower cannot have any 
delinquencies greater than 30 days since the mortgage loan was 
originated.
    (C) A streamlined-assist refinance loan is a special refinance 
option available to existing Section 502 Direct and Guaranteed loan 
borrowers. There are no debt-to-income calculation requirements, no 
credit report requirements, no property inspection requirements, and no 
loan-to-value requirements. There is no appraisal requirement, with the 
exception of Section 502 Direct loan borrowers who have received a 
subsidy. The existing loan must have closed six months prior to loan 
application. Applicants must meet the income eligibility requirements 
of Sec.  3555.151(a) and must not have had any delinquencies greater 
than 30 days on their mortgage account being refinanced 180 days prior 
to loan application.
* * * * *
    (iii) Existing borrowers seeking to refinance using the 
streamlined, non-streamlined, or the streamlined-assist refinance 
options must have demonstrated their ability to meet payment demands by 
maintaining a current mortgage account for 180 days prior to loan 
application. However, if the borrower is using either the streamlined 
or non-streamlined refinance option and their mortgage account being 
refinanced has not been opened for 180 days prior to loan application, 
no defaults must have occurred since the mortgage account was opened.
* * * * *
    (vi) Documentation, costs, and underwriting requirements of 
subparts D, E, and F of this part apply to refinances, unless otherwise 
provided by the Agency.
* * * * *
0
3. Amend Sec.  3555.151 by revising paragraph (i)(3)(iv) to read as 
follows:


Sec.  3555.151  Eligibility requirements.

* * * * *
    (i) * * *
    (3) * * *
    (iv) A previous Agency loan that resulted in any loss to the 
Government within the last seven years.
* * * * *

Joaquin Altoro,
Administrator, Rural Housing Service.
[FR Doc. 2024-21404 Filed 9-18-24; 8:45 am]
BILLING CODE 3410-XV-P


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