Rural Housing Service January 2005 – Federal Register Recent Federal Regulation Documents
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Guaranteed Rural Rental Housing Program; Secondary Mortgage Market Participation
The Rural Housing Service (RHS) is amending its regulations for the Guaranteed Rural Rental Housing Program (GRRHP). Under the GRRHP, RHS guarantees loans for the development of housing and related facilities for low or moderate-income families in rural areas. RHS administers the GRRHP under the authority of the Housing Act of 1949. The GRRHP regulations are being amended to allow RHS, in the case of a default, to buy back guaranteed loans from investors, lower the minimum level of rehabilitation work when guaranteed loans are used for acquisition and rehabilitation, and clarify certain matters involving Ginnie Mae. These regulatory changes are made to increase participation by the secondary mortgage market in the GRRHP.
Surety Requirements
The Rural Housing Service is amending its regulations to change the threshold for surety requirements guaranteeing payment and performance from a $100,000 contract amount to the maximum Rural Development Single Family Housing area lending limit. This limit will vary by locality. This will liberalize the requirement for surety and take into account the increased construction cost of single family homes in Rural Development's Single Family Housing Program. This will ease the burden on small contractors for whom obtaining surety is difficult and expensive, thereby reducing costs to our single family housing borrowers.
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