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					USDA Rural Development 375 Jackson St., Suite 410 St. Paul, MN 55101-1853

Minnesota Guaranteed Lender
February 20, 2009
Currently the Federal Government is operating under a Continuing Resolution (CR) which covers the period Oct. 1, 2008 through March 6, 2009. Under the CR, Rural Development was allocated $2.6 billion for the guaranteed housing program. Demand for this program continues at a historic high and these funds were exhausted Jan. 9, 2009. Applications continue to be processed and Conditional Commitments are issued “subject to receipt of Congressionally appropriated funds.” Lenders can close loans but the Loan Note Guarantee cannot be issued until funds are received and the loan has been obligated. Lenders may continue to submit closing packages; however, the lender must make a certification that there has been no adverse change in the borrower’s condition. This certification is #10 of the Lender Certification on the Conditional Commitment. The lender certification cannot be made until after the funds are obligated. The lender assumes all risk of loss until the Loan Note Guarantee is issued. In Minnesota, we have approved 923 loans and spent $104,121,942 as of Feb. 19, 2009. The numbers as of Feb. 19, 2008 were 603 loans and $68,315,176 obligated. Reservation requests should not be faxed. Form 1980-86 should be submitted with the credit package. Only complete and fully underwritten files are to be submitted. Do not submit files without VOE’s, appraisals, underwriter’s approval, etc. Rural Development does not review files for preapprovals. All information is to be submitted to the underwriter for review.

Fiscal Year 2008 ended Sept. 30, 2008 and was a record-breaking year in Minnesota and nationwide! Minnesota approved 2,417 loans for $4,074,014. Our lending partners have been key in making the Rural Development guaranteed housing program so successful in Minnesota. Our loan volume is high while delinquencies have been maintained well below the national average. A map is attached that shows loan numbers by county.

Congratulations to the top 10 originating lenders in Fiscal Year 2008: Wells Fargo Home Mortgage (all branches) Bremer Bank (all branches) Midwest MN Community Development (MMCDC) Prestige Mortgage Countrywide (all branches) Advisor’s Mortgage Bell Mortgage Wells Federal Bank KleinBank Heritage Bank 275 loans 168 loans 145 loans 94 loans 70 loans 69 loans 66 loans 64 loans 63 loans 54 loans $31,856,123 $17,182,400 $13,590,660 $12,846,907 $ 8,869,299 $ 9,417,467 $ 7,953,650 $ 4,796,524 $10,070,696 $ 5,310,237

STAFF CHANGES Tom DeCrans is the Single-Family Housing Program Director as of October 6, 2008. Tom has worked with the agency for almost 30 years in various positions but most recently as an appraiser and the Program Director for Program Support Services. Jaci Betcher, Guaranteed Housing Specialist, joined our staff on November 10. Jaci is new to Rural Development but has over 25 years of mortgage and banking experience. She replaces Paul Dornfeld who transferred to the Cambridge office as a Rural Business Specialist. Jackie Lawrence, Guaranteed Housing Technician, joined our staff in January. She has worked for various Federal agencies and most recently was an assistant on the Rural Development State Director’s staff. Sarah Yncierto has been promoted to a Guaranteed Housing Specialist but also continues to work as a technician temporarily. Marlene Smith left in December for a position with the Veteran’s Administration. RECENT INFORMATION RELEASES The following information was provided in the SFH Origination News sent by ListServ: Maximum Interest Rates for Single Family Housing Guaranteed Loan Program dated September 9, 2008. The maximum interest rate is stated in 1980.320 of 1980-D and provides two options for calculating the maximum allowable rate. Only interest rates at or below this maximum threshold may be locked. 1. Current Fannie Mae rate as defined in section 1980.302(a). This is generally the Fannie Mae 90 days delivery rate plus 60 basis points rounded up to the nearest quarter of one percent. Fannie Mae historical rates can be found at 2. Lender’s published VA rate for first mortgage loans with no discount points. VA does not publish a daily interest rate. Lenders should refer to published rates offered by their institutions and document it with their rate sheet on the date the rate was locked. The correct VA rate to select is the “par” rate with no discount points. Lenders must document the date the rate was locked. This date will be used to calculate the maximum allowable interest rate. Loan Note Guarantees will not be issued for loans closed above acceptable interest rate thresholds.

Financing Discount Points dated November 25, 2008. Loan discount points to reduce the interest rate is an eligible loan purpose only for low-income applicants. Discount points cannot be financed for applicants with incomes above the low limit. The maximum amount financed cannot exceed 2 percentage points of the loan amount. GUARANTEED UNDERWRITING SYSTEM (GUS) Lenders can now import loan files directly into GUS. See the GUS welcome page or the February/March 2009 issue of The Guaranteed Eagle for additional information. A new GUS User Guide is also available. When an “accept” is received in GUS, only Form 1980-21, flood certification and appraisal are required to be submitted prior to issuance of the Conditional Commitment. If a “refer” or “refer with caution” is received, a fully documented manually underwritten submission is required. New GUS lenders may be required to submit full documentation files for the first few submissions. Further guidance regarding this and other changes will be sent at a later date. Some lenders have closed loans prior to submitting required documents to Rural Development or prior to issuance of the Conditional Commitment. A loan closed without prior Rural Development approval may result in a loan that cannot be guaranteed. LENDER WORKSHOPS Four were held in St Paul in 2008. Another is scheduled for Wednesday, March 11, 2009 at 10:00 am in the first floor conference room, 375 Jackson St, St Paul. Approximate length is 1.5 to 2 hours. If you are interested in attending, contact Sarah at or call her at 651-6027823. Sarah will be happy to assist you in reserving a place for you in the workshop if space is available. FORM 1980-21, REQUEST FOR GUARANTEE Only the 6/06 revision of this form can be accepted. We are receiving some forms where page 1 is the correct revision but the signature page is an older revision. Please destroy any old revisions of Form 1980-21. This form must be fully completed including lender and application information and property address and county. All items must be completed: #1-3 Check applicable boxes #4 Correct number of people living in household #5 Check applicable box regarding credit history #6 Gross annual income and #7 adjusted annual income #8 Ratios #10 Indicate if interest rate based on Fannie Mae or VA rate and date, etc. #13 CAIVRS number(s) #14 Purpose: Loan purpose(s) and amount(s) to be broken down (purchase, guarantee fee, closing costs, etc) with total loan amount at bottom. Must be same amount as in #9. Form 1980-21 must be signed by the lender (underwriter) and the applicants. This form must be completed and signed for all loan submissions including refinances and GUS applications. Applicants should be aware of the acknowledgments/certifications and receive a copy of the form. NONPURCHASING SPOUSE In cases of a nonpurchasing spouse, a purchase money mortgage appears to be acceptable in securing a first lien on the property. However, our legal counsel has advised that there has been

some uncertainty in cases litigated in MN. To avoid any questions and to assure a perfected lien, it is advised that the signature of both spouses be obtained. The two 2007 MN statutes that address this are 507.02 and 507.03. REVISED PROCESSING CHECKLIST A revised checklist is attached. The use of this form is optional but is beneficial to the lender in assuring that complete credit or closing packages are delivered to Rural Development. It also helps us submit the Conditional Commitment or Loan Note Guarantee to the correct location if names and addresses are provided. A self-addressed envelope included with a closing package is also helpful. Postage is not needed on the envelope. Please note that a copy of the mortgage is not required.

RD Instruction 1980-D and all ANs can be found at: Following is a listing of all current ANs. Any ANs not listed here can be disposed of: AN 4326; AN 4330; AN 4335; AN 4336; AN 4337; AN 4341; AN 4342; AN 4345; AN 4346; AN 4350; AN 4362; AN 4363; AN 4364; AN 4365; AN 4366; AN 4367; AN 4385; AN 4386; AN 4389; AN 4394; AN 4402; AN 4404; AN 4407; AN 4411; AN 4412; AN 4413; AN 4414.

1. Subscribe to the Rural Development ListServ to obtain the latest information on Guaranteed Rural Housing loan origination, servicing and GUS news. Provide your email address to: 2. Bookmark as a favorite the property and income eligibility website: If response is “unable to determine” when you type in an address, click on MN on the US map and then on the county. Zoom in to pull up streets. If still unable to determine if a property eligible, contact our office for assistance. 3. GUS Lender training is available on USDA Linc: 1) Select “RHS Home” 2) Select “Training & Resource Library” 3) Scroll to “Guaranteed Underwriting” 4. MN contacts for guaranteed housing loans Specialists: Patti Berry 651-602-7807 Peter Lundquist 651-602-7782 Linda Behrendt 651-602-7797 Jaci Betcher 651-602-7803 Sarah Yncierto 651-602-7823 Technicians: Tanya Roberts 651-602-7794 Jackie Lawrence 651-602-7792 Program Director: Tom DeCrans 651-602-7790 Fax number: 651-602-7825 Email:

USDA, Rural Development is an Equal Opportunity Lender, Provider and Employer. Complaints of discrimination should be sent to: USDA, Director, Office of Civil Rights, Washington, D.C, 20250-9410

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