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.

Proposed Rules Federal Register

76745 

Vol. 89, No. 182 

Thursday, September 19, 2024 

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: 

laurie.mohr@usda.gov. 

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 

§ 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 


lotter on DSK11XQN23PROD with PROPOSALS1
76746 Federal Register / Vol. 89, No. 182 / Thursday, September 19, 2024 / Proposed Rules 

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 sevenyears 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 sevenyear 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, nonstreamlined, 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 

§ 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 


lotter on DSK11XQN23PROD with PROPOSALS1
Federal Register / Vol. 89, No. 182 / Thursday, September 19, 2024 / Proposed Rules 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, nonstreamlined, 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 nonstreamlined 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 nonstreamlined 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 § 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 § 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 § 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, nonstreamlined, 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,’’ 


lotter on DSK11XQN23PROD with PROPOSALS1
76748 Federal Register / Vol. 89, No. 182 / Thursday, September 19, 2024 / Proposed Rules 

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 governmentto-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 costbenefit 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 Guaranteebased 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). 


lotter on DSK11XQN23PROD with PROPOSALS1
Federal Register / Vol. 89, No. 182 / Thursday, September 19, 2024 / Proposed Rules 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: program.intake@usda.gov. 

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 

■ 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. 

■ 2. Amend § 3555.101 by revising 

paragraphs (d)(3)(i)(A) through (C) and 

(d)(3)(iii) and (vi) to read as follows: 

§ 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 nonstreamlined 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 nonstreamlined 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 § 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, nonstreamlined, 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. 

* * * * * 

■ 3. Amend § 3555.151 by revising 

paragraph (i)(3)(iv) to read as follows: 

§ 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 


lotter on DSK11XQN23PROD with PROPOSALS1