Single Family Housing Guaranteed Housing Payment Supplement Account Demonstration Program, 59823-59825 [2024-16149]
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Federal Register / Vol. 89, No. 142 / Wednesday, July 24, 2024 / Rules and Regulations
the Subcommittee voted to recommend
to the Committee the changes as
contained herein, and the full
Committee subsequently voted
unanimously to recommend this action
to AMS.
The Committee’s meetings were
widely publicized throughout the
production area. The raisin industry and
all interested persons were invited to
attend the meetings and participate in
Committee deliberations on all issues.
The Subcommittee meeting on October
3, 2023, and subsequent full Committee
meeting on October 5, 2023, were each
open to the public where any interested
parties was able to express views on this
issue. In addition, interested persons
were invited to submit comments on
this final rule, including the regulatory
and information collection impacts of
this action on small businesses.
An interim final rule concerning this
action was published in the Federal
Register on December 11, 2023 (88 FR
85819). The interim final rule was
effective on December 12, 2023. Copies
of the interim rule were mailed or sent
via email to California raisin handlers.
A copy of the interim rule was made
available through the internet by AMS
via https://www.regulations.gov. AMS
provided a 60-day comment period
ending February 9, 2024, to give
interested persons to respond to the
interim final rule. No comments were
received. Accordingly, no changes have
been made to the rule as published.
This final rule continues in effect
temporary changes to the minimum
requirements for substandard and
maturity dockage under the Order’s
handling regulations for the 2023–2024
crop year. The minimum requirements
have been temporarily relaxed to
accommodate raisins adversely
impacted by severe weather conditions.
Producers and handlers are aware of
this action as it continues in effect the
interim final rule effective on December
12, 2023, and need no preparation time
to comply. Accordingly, pursuant to 5
U.S.C. 553(d), AMS finds that good
cause exists for not postponing the
effective date of this final rule until 30
days after publication in the Federal
Register. The relaxation of the
minimum requirements expires at the
end of the 2023–2024 crop year on July
31, 2024.
In accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C.
Chapter 35), the Order’s information
collection requirements have been
previously approved by OMB and
assigned OMB No. 0581–0178,
Vegetable and Specialty Crops. No
changes in those requirements are
necessary as a result of this action.
VerDate Sep<11>2014
16:31 Jul 23, 2024
Jkt 262001
Should any changes become necessary,
they would be submitted to OMB for
approval.
This final rule would not impose any
additional reporting or recordkeeping
requirements on either small or large
California raisin handlers. As with all
Federal marketing order programs,
reports and forms are periodically
reviewed to reduce information
requirements and duplication by
industry and public sector agencies.
AMS is committed to complying with
the E-Government Act, to promote the
use of the internet and other
information technologies to provide
increased opportunities for citizen
access to Government information and
services, and for other purposes.
AMS has not identified any relevant
Federal rules that duplicate, overlap, or
conflict with this final rule.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://
www.ams.usda.gov/rulesregulations/
moa/small-businesses. Any questions
about the compliance guide should be
sent to Richard Lower at the previously
mentioned address in the FOR FURTHER
INFORMATION CONTACT section.
After consideration of all relevant
material presented, including the
information and recommendations
submitted by the Committee and other
available information, AMS has
determined that finalizing the interim
rule, without change, as published in
the Federal Register of December 11,
2023 (88 FR 85819), is consistent with
and will tend to effectuate the purposes
of the Act.
List of Subjects in 7 CFR Part 989
Grapes, Marketing agreements,
Raisins, Reporting and recordkeeping
requirements.
PART 989—RAISINS PRODUCED
FROM GRAPES GROWN IN
CALIFORNIA
Accordingly, the interim final rule
amending 7 CFR part 989, which was
published at 88 FR 85819 on December
11, 2023, is adopted as a final rule
without change.
■
Erin Morris,
Associate Administrator, Agricultural
Marketing Service.
[FR Doc. 2024–16173 Filed 7–23–24; 8:45 am]
BILLING CODE P
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59823
DEPARTMENT OF AGRICULTURE
Rural Housing Service
7 CFR Parts 3555
[Docket No. RHS–24–SFH–0025]
Single Family Housing Guaranteed
Housing Payment Supplement
Account Demonstration Program
Rural Housing Service, USDA.
ACTION: Notification.
AGENCY:
The Rural Housing Service
(RHS or the Agency), a Rural
Development (RD) agency of the United
States Department of Agriculture
(USDA), is issuing this document for a
demonstration program that will
establish a new loss mitigation retention
option, referred to as the Payment
Supplement Account (PSA). The
Agency’s intention of this
demonstration program is to assist
borrowers who have experienced a
documented hardship that led to an
involuntary inability to pay their
mortgage obligation, require payment
reduction to resume making a monthly
payment, and currently have a below
market interest rate. This document
briefly discusses a special servicing
option for servicers to utilize to
continue assisting struggling borrowers
who seek loss mitigation alternatives,
regardless of the nature of their
hardship.
SUMMARY:
The effective date of this
demonstration program is July 24, 2024.
The duration of the demonstration
program is anticipated to continue until
July 24, 2026, at which time the RHS
may extend the demonstration program
(with or without modifications) or
terminate it depending on the workload
and resources needed to administer the
program, feedback from the public, and
the effectiveness of the program. RHS
will notify the public whether the
demonstration program has been
extended or terminated.
FOR FURTHER INFORMATION CONTACT:
Stephanie Freeman, Finance and Loan
Analyst, Policy, Analysis, and
Communications Branch, Single Family
Housing Guaranteed Loan Division,
Rural Development, U.S. Department of
Agriculture, Email: stephanie.freeman@
usda.gov; Phone: (314) 457–6413.
If you are interested in participating
in this demonstration program or if you
have any questions, please contact the
Loan Servicing Branch at
SFHGLPServicing@usda.gov.
SUPPLEMENTARY INFORMATION:
DATES:
E:\FR\FM\24JYR1.SGM
24JYR1
59824
Federal Register / Vol. 89, No. 142 / Wednesday, July 24, 2024 / Rules and Regulations
Authority
The SFHGLP is authorized by Section
502(h) of the Housing Act of 1949, as
amended, codified at 42 U.S.C. 1472(h);
and implemented under 7 CFR part
3555.
ddrumheller on DSK120RN23PROD with RULES1
Overview
The RHS is committed to helping
improve the economy and quality of life
in rural areas by offering a variety of
programs. The Agency offers loans,
grants, and loan guarantees to help
create jobs, expand economic
development, and provide critical
infrastructure investments. The RHS
also provides technical assistance loans
and grants by partnering with
agricultural producers, cooperatives,
Indian tribes, non-profits, and other
local, state, and federal agencies.
Affordable housing is essential to the
vitality of communities in rural
America. RD’s Single Family Housing
Programs give families and individuals
the opportunity to purchase, build,
repair their existing home, or to
refinance their current mortgage under
certain criteria. Eligibility for these
loans, loan guarantees, or grants is based
on income which varies according to the
average median income for each eligible
rural area.
Section 502 Guaranteed Loan Program
provides a 90 percent loan note
guarantee to approved lenders in efforts
to provide low- and moderate-income
households the opportunity to own
adequate, modest, decent, safe and
sanitary dwellings as their primary
residence in eligible rural areas. Eligible
applicants may purchase, build,
rehabilitate, improve or relocate a
dwelling in an eligible rural area.
Applicant eligibility for this program is
determined by the lender pursuant to
the criteria set forth in 7 CFR part 3555,
subpart D.
The Domestic Policy Council (DPD)
and the National Economic Council
(NEC) has recently urged agencies to
begin implementing workable home
retention solutions that would provide
subsequent mortgage protections and
minimize the borrowers’ risk of
foreclosure considering the current
market conditions. Therefore, the
Agency has continued to explore
additional home retention options for
servicers to further assist borrowers and
reduce Agency losses.
The RHS may authorize limited
demonstration programs to test new
approaches to offering housing under
the statutory authority granted to the
Secretary, as set forth in 42 U.S.C.
1476(b); 7 CFR 3555.2(b). Demonstration
programs are time- and scope-limited
VerDate Sep<11>2014
16:31 Jul 23, 2024
Jkt 262001
programs designed to test new
approaches and for those reasons,
demonstration programs need not be
consistent with all regulatory provisions
while active. This demonstration
program helps struggling borrowers that
are delinquent on their mortgage
payments and are unable to obtain a
payment reduction utilizing the
currently available loss mitigation
options.
Purpose of the Payment Supplement
Account
The Single-Family Housing
Guaranteed Loan Program (SFHGLP)
provides borrowers with the maximum
opportunity to remain successful
homeowners and provides servicers
with multiple loan servicing options to
support borrowers who have
experienced a documented hardship.
RD continues to explore strategies to
improve the quality and effectiveness of
our program.
Typically, assistance is accomplished
through a combination of rate reduction,
term extension, and/or a reduction of
the borrower’s interest-bearing
principal. These assistance options can
be accomplished with the utilization of
a stand-alone Mortgage Recovery
Advance (MRA), also known to the
industry as a partial claim. While the
Agency’s loss mitigation options have
continued to deliver assistance to
borrowers in default, unprecedented
higher interest rates in conjunction with
the current economic conditions have
impacted the ability and delayed the
effectiveness of those relief measures to
meaningfully assist borrowers.
Due to the sensitivity of the changes
in mortgage rates, rise in consumer debt,
and the challenges with mortgage
payments associated with the pressures
on household finances, the Agency has
continued to evaluate additional options
for servicers in an effort to further assist
borrowers. This demonstration program
establishes a new loss mitigation
retention option, referred to as the
Payment Supplement Account (PSA).
The PSA shall be funded by a standalone MRA. The PSA assists borrowers
who have experienced a documented
hardship that led to an involuntary
inability to pay their mortgage
obligation, require payment reduction to
resume making a monthly payment, and
currently have a below market interest
rate.
Discussion of the Payment Supplement
Account
7 CFR 3555.304(d) permits the use of
an MRA in conjunction with loss
mitigation to provide payment relief to
borrowers. The MRA allows the servicer
PO 00000
Frm 00006
Fmt 4700
Sfmt 4700
to advance funds on behalf of the
borrower to satisfy the borrower’s
arrearage, pay legal fees and foreclosure
costs related to a cancelled foreclosure
action, and reduce the principal balance
of the loan.
The PSA demonstration program shall
require the servicer to use a portion of
the MRA funds to cure the arrearage and
segregate the remaining funds in a
separate, non-interest-bearing custodial
account to provide monthly payment
relief to the borrower. The PSA shall be
funded by a stand-alone MRA, which
shall be incrementally utilized to first,
payoff the arrearages accumulated
during a hardship to bring the loan
current and second, to supplement the
principal portion of the borrower’s
payment in monthly increments and
provide payment relief for three years.
The PSA shall remain with the
servicer’s lien as a non-interest-bearing,
recoverable servicing advance. The
MRA created under this demonstration
program shall not be secured by a
second lien in favor of RD, which
eliminates the need for notary fees,
recording costs, and additional legal
fees.
Eligibility Requirements
To be eligible under this
demonstration program, all the
following parameters shall apply:
• The borrower must occupy the
home as their primary residence.
• The borrower must have
experienced a documented hardship
and requires payment reduction to
resume making a regular monthly
payment. The hardship that caused the
borrower’s involuntary inability to pay
must have been cured. Lenders and
servicers may refer to HB–1–3555
Attachment 18–A for guidance on this
inquiry.
• There is no reasonable ability for
the borrower to cure the delinquency on
their own within 12 months without
assistance.
• The MRA shall be utilized to cure
the arrearage, bring the loan current,
and fund a PSA that will be utilized to
provide a targeted reduction to the
borrower’s principal and interest (P&I)
payment for three years. At the end of
the three years, the borrower shall be
responsible for resuming the full
amount of their monthly contractual
payment.
• The servicer should target a 25
percent principal and interest reduction,
not to exceed the principal portion of
the principal and interest, for a
maximum 3-year total period. If a 25
percent reduction cannot be achieved,
offer the achievable reduction, not less
E:\FR\FM\24JYR1.SGM
24JYR1
ddrumheller on DSK120RN23PROD with RULES1
Federal Register / Vol. 89, No. 142 / Wednesday, July 24, 2024 / Rules and Regulations
than 5 percent, and not to exceed a
maximum 3-year total period.
• Three trial timely payments will be
required. Guidance on trial payments is
available at HB–1–3555 Attachment 18–
A.
• The borrower shall sign an
agreement to repay the advance in full.
• The servicer shall segregate the
funds paid by USDA for the PSA in a
separate, non-interest-bearing custodial
account (the PSA) characterized by the
following:
Æ is deposited with a financial
institution whose accounts are insured
by the Federal Deposit Insurance
Corporation (FDIC) or the National
Credit Union Administration (NCUA);
Æ does not limit the servicer’s access
to funds for the payment supplement,
require an advance notice of
withdrawal, or require the payment of a
withdrawal penalty; and
Æ clearly identifies the funds being
held in that account as being derived
from and held as part of the PSA
Agreement executed by the borrower.
• The servicer must ensure that the
funds in the PSA are clearly delineated
as funds held as a result of the PSA
Agreement executed by the borrower,
for use only as provided for in the PSA
Agreement. Neither the servicer nor the
borrower may exercise discretion in the
use and application of the funds from
the PSA; funds shall be used and
applied only to reduce the principal
balance.
Æ The MRA utilized to fund the PSA
will be limited to 30 percent of the
borrower’s unpaid principal balance at
the time of initial default. If the
borrower has previously been provided
an MRA they may still be considered for
a PSA MRA provided that the combined
amount of MRAs do not exceed the 30
percent maximum outlined above.
Æ This option is the last option in the
loss mitigation waterfall, and it must be
determined by the servicer that the
borrower is not eligible for any other
retention solution prior to solicitation
for participation in this pilot.
Æ Servicers shall advance their own
funds to bring the loan current prior to
requesting the MRA to establish the
PSA.
Æ Servicers may file an MRA claim
with RD to recoup the funds they
advance on behalf of the borrower and
utilized to fund the PSA, subject to the
MRA claim filing requirements
described in 7 CFR part 3555.
Æ The amount of the non-interestbearing receivable will remain part of
the servicer’s first lien.
Æ The servicer shall agree to repay the
amount of the MRA to RD when the first
lien matures, the borrower sells or
VerDate Sep<11>2014
16:31 Jul 23, 2024
Jkt 262001
refinances the home, or otherwise pays
the loan in full.
Æ The servicer shall draw from the
PSA monthly, only when the borrower
makes their portion of the monthly
payment, to provide payment relief. As
funds are advanced, the amount drawn
will be added to the non-interestbearing receivable.
Æ If a borrower makes the full amount
of their monthly contractual payment,
the servicer shall still make the monthly
draw from the PSA. Any additional
funds paid by the borrower shall be
applied to curtail the principal balance.
Æ A borrower who re-defaults while
receiving PSA funds can re-enter the RD
loss mitigation waterfall and be
evaluated for traditional options, if
eligible. Any remaining PSA funds
should be applied to the unpaid
principal balance as part of that loss
mitigation action.
Æ If a servicing transfer occurs on the
guaranteed loan, the servicer shall
ensure that the funds in the PSA
awaiting disbursement are transferred to
the new servicer at the same time as the
mortgage transfer. The new servicer
shall assume any remaining obligations
of the initial servicer in connection with
the ongoing loss mitigation action
consistent with the terms of the PSA
Agreement.
Æ If there is a loss due to a short sale,
a deed-in-lieu of foreclosure, or a
foreclosure, any remaining funds in the
PSA shall be applied towards the
principal balance and added to the noninterest-bearing receivable prior to a loss
claim being filed.
The servicer may be required to
submit additional information about the
pilot program outside of the usual
electronic reporting process. This
enhanced report shall be provided as
requested and should include at
minimum the number of current and
existing PSA MRAs provided under this
pilot. Loan servicing and loss claim
submissions will be conducted in
accordance with the Housing Act of
1949, as amended, and 7 CFR part 3555.
Paperwork Reduction Act
The regulatory waivers for this
demonstration program 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).
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
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 at
https://www.usda.gov/sites/default/
files/documents/ad-3027.pdf, 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, Washington,
DC 20250–9410; or
(2) Fax: (833) 256–1665 or (202) 690–
7442; or
(3) Email: Program.Intake@usda.gov.
Yvonne Hsu,
Acting Administrator, Rural Housing Service.
[FR Doc. 2024–16149 Filed 7–23–24; 8:45 am]
BILLING CODE 3410–XV–P
Non-Discrimination Statement
In accordance with Federal civil
rights laws and USDA civil rights
regulations and policies, the USDA, its
Mission Areas, agencies, staff offices,
employees, and institutions
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59825
E:\FR\FM\24JYR1.SGM
24JYR1
]]>Agencies
[Federal Register Volume 89, Number 142 (Wednesday, July 24, 2024)]
[Rules and Regulations]
[Pages 59823-59825]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16149]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Rural Housing Service
7 CFR Parts 3555
[Docket No. RHS-24-SFH-0025]
Single Family Housing Guaranteed Housing Payment Supplement
Account Demonstration Program
AGENCY: Rural Housing Service, USDA.
ACTION: Notification.
-----------------------------------------------------------------------
SUMMARY: The Rural Housing Service (RHS or the Agency), a Rural
Development (RD) agency of the United States Department of Agriculture
(USDA), is issuing this document for a demonstration program that will
establish a new loss mitigation retention option, referred to as the
Payment Supplement Account (PSA). The Agency's intention of this
demonstration program is to assist borrowers who have experienced a
documented hardship that led to an involuntary inability to pay their
mortgage obligation, require payment reduction to resume making a
monthly payment, and currently have a below market interest rate. This
document briefly discusses a special servicing option for servicers to
utilize to continue assisting struggling borrowers who seek loss
mitigation alternatives, regardless of the nature of their hardship.
DATES: The effective date of this demonstration program is July 24,
2024. The duration of the demonstration program is anticipated to
continue until July 24, 2026, at which time the RHS may extend the
demonstration program (with or without modifications) or terminate it
depending on the workload and resources needed to administer the
program, feedback from the public, and the effectiveness of the
program. RHS will notify the public whether the demonstration program
has been extended or terminated.
FOR FURTHER INFORMATION CONTACT: Stephanie Freeman, Finance and Loan
Analyst, Policy, Analysis, and Communications Branch, Single Family
Housing Guaranteed Loan Division, Rural Development, U.S. Department of
Agriculture, Email: [email protected]; Phone: (314) 457-6413.
If you are interested in participating in this demonstration
program or if you have any questions, please contact the Loan Servicing
Branch at [email protected].
SUPPLEMENTARY INFORMATION:
[[Page 59824]]
Authority
The SFHGLP is authorized by Section 502(h) of the Housing Act of
1949, as amended, codified at 42 U.S.C. 1472(h); and implemented under
7 CFR part 3555.
Overview
The RHS is committed to helping improve the economy and quality of
life in rural areas by offering a variety of programs. The Agency
offers loans, grants, and loan guarantees to help create jobs, expand
economic development, and provide critical infrastructure investments.
The RHS also provides technical assistance loans and grants by
partnering with agricultural producers, cooperatives, Indian tribes,
non-profits, and other local, state, and federal agencies.
Affordable housing is essential to the vitality of communities in
rural America. RD's Single Family Housing Programs give families and
individuals the opportunity to purchase, build, repair their existing
home, or to refinance their current mortgage under certain criteria.
Eligibility for these loans, loan guarantees, or grants is based on
income which varies according to the average median income for each
eligible rural area.
Section 502 Guaranteed Loan Program provides a 90 percent loan note
guarantee to approved lenders in efforts to provide low- and moderate-
income households the opportunity to own adequate, modest, decent, safe
and sanitary dwellings as their primary residence in eligible rural
areas. Eligible applicants may purchase, build, rehabilitate, improve
or relocate a dwelling in an eligible rural area. Applicant eligibility
for this program is determined by the lender pursuant to the criteria
set forth in 7 CFR part 3555, subpart D.
The Domestic Policy Council (DPD) and the National Economic Council
(NEC) has recently urged agencies to begin implementing workable home
retention solutions that would provide subsequent mortgage protections
and minimize the borrowers' risk of foreclosure considering the current
market conditions. Therefore, the Agency has continued to explore
additional home retention options for servicers to further assist
borrowers and reduce Agency losses.
The RHS may authorize limited demonstration programs to test new
approaches to offering housing under the statutory authority granted to
the Secretary, as set forth in 42 U.S.C. 1476(b); 7 CFR 3555.2(b).
Demonstration programs are time- and scope-limited programs designed to
test new approaches and for those reasons, demonstration programs need
not be consistent with all regulatory provisions while active. This
demonstration program helps struggling borrowers that are delinquent on
their mortgage payments and are unable to obtain a payment reduction
utilizing the currently available loss mitigation options.
Purpose of the Payment Supplement Account
The Single-Family Housing Guaranteed Loan Program (SFHGLP) provides
borrowers with the maximum opportunity to remain successful homeowners
and provides servicers with multiple loan servicing options to support
borrowers who have experienced a documented hardship. RD continues to
explore strategies to improve the quality and effectiveness of our
program.
Typically, assistance is accomplished through a combination of rate
reduction, term extension, and/or a reduction of the borrower's
interest-bearing principal. These assistance options can be
accomplished with the utilization of a stand-alone Mortgage Recovery
Advance (MRA), also known to the industry as a partial claim. While the
Agency's loss mitigation options have continued to deliver assistance
to borrowers in default, unprecedented higher interest rates in
conjunction with the current economic conditions have impacted the
ability and delayed the effectiveness of those relief measures to
meaningfully assist borrowers.
Due to the sensitivity of the changes in mortgage rates, rise in
consumer debt, and the challenges with mortgage payments associated
with the pressures on household finances, the Agency has continued to
evaluate additional options for servicers in an effort to further
assist borrowers. This demonstration program establishes a new loss
mitigation retention option, referred to as the Payment Supplement
Account (PSA). The PSA shall be funded by a stand-alone MRA. The PSA
assists borrowers who have experienced a documented hardship that led
to an involuntary inability to pay their mortgage obligation, require
payment reduction to resume making a monthly payment, and currently
have a below market interest rate.
Discussion of the Payment Supplement Account
7 CFR 3555.304(d) permits the use of an MRA in conjunction with
loss mitigation to provide payment relief to borrowers. The MRA allows
the servicer to advance funds on behalf of the borrower to satisfy the
borrower's arrearage, pay legal fees and foreclosure costs related to a
cancelled foreclosure action, and reduce the principal balance of the
loan.
The PSA demonstration program shall require the servicer to use a
portion of the MRA funds to cure the arrearage and segregate the
remaining funds in a separate, non-interest-bearing custodial account
to provide monthly payment relief to the borrower. The PSA shall be
funded by a stand-alone MRA, which shall be incrementally utilized to
first, payoff the arrearages accumulated during a hardship to bring the
loan current and second, to supplement the principal portion of the
borrower's payment in monthly increments and provide payment relief for
three years. The PSA shall remain with the servicer's lien as a non-
interest-bearing, recoverable servicing advance. The MRA created under
this demonstration program shall not be secured by a second lien in
favor of RD, which eliminates the need for notary fees, recording
costs, and additional legal fees.
Eligibility Requirements
To be eligible under this demonstration program, all the following
parameters shall apply:
The borrower must occupy the home as their primary
residence.
The borrower must have experienced a documented hardship
and requires payment reduction to resume making a regular monthly
payment. The hardship that caused the borrower's involuntary inability
to pay must have been cured. Lenders and servicers may refer to HB-1-
3555 Attachment 18-A for guidance on this inquiry.
There is no reasonable ability for the borrower to cure
the delinquency on their own within 12 months without assistance.
The MRA shall be utilized to cure the arrearage, bring the
loan current, and fund a PSA that will be utilized to provide a
targeted reduction to the borrower's principal and interest (P&I)
payment for three years. At the end of the three years, the borrower
shall be responsible for resuming the full amount of their monthly
contractual payment.
The servicer should target a 25 percent principal and
interest reduction, not to exceed the principal portion of the
principal and interest, for a maximum 3-year total period. If a 25
percent reduction cannot be achieved, offer the achievable reduction,
not less
[[Page 59825]]
than 5 percent, and not to exceed a maximum 3-year total period.
Three trial timely payments will be required. Guidance on
trial payments is available at HB-1-3555 Attachment 18-A.
The borrower shall sign an agreement to repay the advance
in full.
The servicer shall segregate the funds paid by USDA for
the PSA in a separate, non-interest-bearing custodial account (the PSA)
characterized by the following:
[cir] is deposited with a financial institution whose accounts are
insured by the Federal Deposit Insurance Corporation (FDIC) or the
National Credit Union Administration (NCUA);
[cir] does not limit the servicer's access to funds for the payment
supplement, require an advance notice of withdrawal, or require the
payment of a withdrawal penalty; and
[cir] clearly identifies the funds being held in that account as
being derived from and held as part of the PSA Agreement executed by
the borrower.
The servicer must ensure that the funds in the PSA are
clearly delineated as funds held as a result of the PSA Agreement
executed by the borrower, for use only as provided for in the PSA
Agreement. Neither the servicer nor the borrower may exercise
discretion in the use and application of the funds from the PSA; funds
shall be used and applied only to reduce the principal balance.
[cir] The MRA utilized to fund the PSA will be limited to 30
percent of the borrower's unpaid principal balance at the time of
initial default. If the borrower has previously been provided an MRA
they may still be considered for a PSA MRA provided that the combined
amount of MRAs do not exceed the 30 percent maximum outlined above.
[cir] This option is the last option in the loss mitigation
waterfall, and it must be determined by the servicer that the borrower
is not eligible for any other retention solution prior to solicitation
for participation in this pilot.
[cir] Servicers shall advance their own funds to bring the loan
current prior to requesting the MRA to establish the PSA.
[cir] Servicers may file an MRA claim with RD to recoup the funds
they advance on behalf of the borrower and utilized to fund the PSA,
subject to the MRA claim filing requirements described in 7 CFR part
3555.
[cir] The amount of the non-interest-bearing receivable will remain
part of the servicer's first lien.
[cir] The servicer shall agree to repay the amount of the MRA to RD
when the first lien matures, the borrower sells or refinances the home,
or otherwise pays the loan in full.
[cir] The servicer shall draw from the PSA monthly, only when the
borrower makes their portion of the monthly payment, to provide payment
relief. As funds are advanced, the amount drawn will be added to the
non-interest-bearing receivable.
[cir] If a borrower makes the full amount of their monthly
contractual payment, the servicer shall still make the monthly draw
from the PSA. Any additional funds paid by the borrower shall be
applied to curtail the principal balance.
[cir] A borrower who re-defaults while receiving PSA funds can re-
enter the RD loss mitigation waterfall and be evaluated for traditional
options, if eligible. Any remaining PSA funds should be applied to the
unpaid principal balance as part of that loss mitigation action.
[cir] If a servicing transfer occurs on the guaranteed loan, the
servicer shall ensure that the funds in the PSA awaiting disbursement
are transferred to the new servicer at the same time as the mortgage
transfer. The new servicer shall assume any remaining obligations of
the initial servicer in connection with the ongoing loss mitigation
action consistent with the terms of the PSA Agreement.
[cir] If there is a loss due to a short sale, a deed-in-lieu of
foreclosure, or a foreclosure, any remaining funds in the PSA shall be
applied towards the principal balance and added to the non-interest-
bearing receivable prior to a loss claim being filed.
The servicer may be required to submit additional information about
the pilot program outside of the usual electronic reporting process.
This enhanced report shall be provided as requested and should include
at minimum the number of current and existing PSA MRAs provided under
this pilot. Loan servicing and loss claim submissions will be conducted
in accordance with the Housing Act of 1949, as amended, and 7 CFR part
3555.
Paperwork Reduction Act
The regulatory waivers for this demonstration program 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).
Non-Discrimination Statement
In accordance with Federal civil rights laws and 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 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 at https://www.usda.gov/sites/default/files/documents/ad-3027.pdf, 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, Washington, DC
20250-9410; or
(2) Fax: (833) 256-1665 or (202) 690-7442; or
(3) Email: [email protected].
Yvonne Hsu,
Acting Administrator, Rural Housing Service.
[FR Doc. 2024-16149 Filed 7-23-24; 8:45 am]
BILLING CODE 3410-XV-P
