Earlier this month, the Rural Housing Service amended the regulations surrounding its Single Family Housing Guaranteed Loan program. The new regulations affect three areas: lender indemnification, refinancing and Qualified Mortgage requirements.
The final rule expands lender indemnification authority for loss claims in the case of fraud, misrepresentation or noncompliance with applicable requirements. It also amends the agency’s refinancing provisions to require that the interest rate on the new loan not exceed the rate on the original loan, and adds a new streamlined refinance option. Finally, the rule conforms the agency’s programs to the ability to repay rules under the Truth in Lending Act, stating that a loan guaranteed by RHS is a Qualified Mortgage if it meets certain requirements set forth by the Consumer Financial Protection Bureau.