USDA Rural Development
375 Jackson St., Suite 410
St. Paul, MN 55101-1853
FISCAL YEAR 2009
Fiscal year 2009 was another record breaking year for the Rural Development Guaranteed Rural
Housing program! Nationwide 133,045 loans for $16.2 billion were obligated. In Minnesota, 3,781
loans were guaranteed with $440,016,013 invested in rural Minnesota. This represents an increase of
56.4 percent in number of loans and 61.1 percent in dollars from Fiscal Year 2008. We were able to
accomplish this unprecedented volume with the addition of temporary technicians and specialists and
also with the assistance of the Rural Development area offices. The attached map indicates the
number of loans made in each county.
Each approved lender listed below exceeded $1 million in loan GRH loan approvals during Fiscal Year
Associated Bank, NA Guaranteed Rate, Inc Pioneer Bank
Bank of America, NA Heritage Bank, NA Prestige Mortgage
Bank of the West Home Federal Savings Bank Rescue Mortgage, Inc
BankVista Home Mortgage Resources River City Mortgage Financial, LLC
Bell Mortgage Home State Bank Riverwood Bank
Brainerd Savings & Loan Assoc Homeland Mortgage, LLC Security Bank USA
Bremer Bank, NA JP Morgan Chase Bank, NA Security Bank Waconia
Clearwater Mortgage Kleinbank State Bank of Paw Paw
Community Resource Bank Lake Region Bank Suntrust Mortgage, Inc
Cornerstone Mortgage Co Lakeland Mortgage Corp The Business Bank dba Prime Mtg
DHI Mortgage Co Liberty Savings Bank Taylor, Bean & Whitaker Mortgage
Eastwood Bank Mac-Clair Mortgage Corp United Prairie Bank
First Farmers & Merchants State Bank Mercants Bank, NA US Bank
First Minnesota Bank Metlife Bank, NA USA Funding Corp
First National Bank of Walker Midcountry Bank Valley Mortgage, Inc
First State Bank Southwest Midwest MN Community Dev (MMCDC) Wells Fargo Bank, NA
First State Bank of Wyoming Mortgage Services III Wells Federal Bank
Flagstar Bank North Shore Bank of Commerce
Frandsen Bank & Trust Northwoods Bank of Minnesota
GFS, Inc, dba Harmonic Mortgage Peoples State Bank of Plainview
GSF Mortgage Corp PHH Home Loans
The following participating lenders originated more than $1 million in GRH loans:
Advisor’s Mortgage Greater MN Lending, LLC Northview Lending Services
American Pride Home Services Kregg Wolff Ent, dba Principle Mortgage One Mortgage
Anderson Gabriel Mortgage, Inc Lake Region Mortgage Pine Country Bank
Central Minnesota FCU Lakes Mortgage Group Prime Source Funding
Granite City Mortgage MCT Financial State Bank of Delano
Mortgages on Main Tacet Resources
Thank you for choosing Guaranteed Rural Housing financing. We look forward to another successful
year in 2010.
FISCAL YEAR 2010
As of January 31, 2010, $7.2 billion has been obligated nationally. In Minnesota, we have obligated
1,376 loans for $160,940,043. This compares to 826 loans and $93,396,890 obligated as of January
31 of last year.
Turnaround times are now posted on the website at www.rurdev.usda.gov/mn under Single Family
We’re always looking to improve the website. If there is something you would like to see on the
website, please e-mail Adam Czech at firstname.lastname@example.org.
STATE DIRECTOR COLLEEN LANDKAMER
I want to take this opportunity to sincerely thank the many lenders that use our guaranteed rural
housing program. As already highlighted, we shattered all previous funding records in 2009 and are
already off to a fast start in fiscal year 2010. However, Rural Development’s reach is not limited
strictly to housing. We administer over 40 programs and, thanks in large part to the Recovery Act, we
invested over $780 million throughout rural Minnesota in 2009. This also shattered our previous
funding record of $680 million set in 2006. Since 2002, Rural Development has invested almost $4.4
billion throughout Minnesota. We appreciate all that you do to help people become home owners in
rural Minnesota. As you interact and network with people in the lending industry, remember that we
also have guaranteed loan programs for businesses, infrastructure, renewable energy and multi-
family housing. Any help you can provide in spreading the word about all of our guaranteed loan
programs in the lending community is greatly appreciated.
Lender training sessions will be offered at the Rural Development office in St Paul on Wednesday,
February 24, 2010 and Tuesday, March 16, 2010. Both sessions are currently full with a waiting list
but we do plan to hold additional meetings in the future. This training is not mandatory. The training
will be very similar to that provided last year but with updated information. The information provided
at both the February and March sessions will be the same. The meetings will begin at 10:00 and last
from one to two hours. Minnesota Housing Finance Agency (MHFA) will provide a brief presentation
of their programs.
It is our intention to hold two outstate meetings later this spring. Locations and dates have not yet
been determined but will probably be held in the Marshall and Detroit Lakes areas. Notification will
be sent when additional St Paul and the outstate meetings are scheduled.
Online training is also available at https://usdalinc.sc.egov.usda.gov. Select “RHS LINC Home” and
then “Training & Resource Library”. Training is mandatory for all new lenders and for all new GUS
users. Lenders may utilize this on-demand training as an option to fulfill that requirement.
FHA APPRAISAL CHANGES
As of October 1, 2009, all appraisers that were not state certified were removed from the FHA
appraiser roster. There has been no change in Rural Development requirements regarding
appraisers. Appraisers certified or licensed in Minnesota may be used (1980.334(a)). If you select an
appraiser that is not on the FHA roster, a home inspection should also be obtained. The
requirements of 1980.341(b) and AN No 4476 must be met.
RECENT INFORMATION RELEASES
SFH Origination News sent by ListServ:
Underwriting and Loan Closing Reminders: Multiple Subjects -January 20, 2010
Cash Back to the Borrower at Closing
The borrower cannot receive any cash back at closing except for costs paid prior to closing such as
earnest money, appraisal and credit report fees. Cash back is limited to permissible loan purposes
indicated in 1980.310 of RD Instruction 1980-D. The borrower cannot be paid pro-rated real estate
Grossing Up Non-Taxable Income
Income that is not subject to federal income tax may be grossed up for repayment purposes. The
amount is limited to the amount of tax savings and an adjustment for any amount other than the
applicable tax rate is not authorized. The lender must fully document the adjustment amount used.
Refer to RD Instruction 1980.345(d)(1)(viii) regarding debts written off when evaluating a credit
history that includes a short sale agreement.
Loan Data – Essential Document: Uniform Residential Loan Application (URLA)
A complete signed and dated URLA must be provided. A copy of the initial, final or both may be
submitted to meet this requirement.
GUS Enhancement: Streamline Refinance -January 19, 2010
As of January 27, 2010, streamlined refinance transactions cannot be submitted utilizing GUS. A
manual underwrite is required.
Notice of Funding Availability (NOFA) – Refinance Transactions -November 2, 2009
Currently does not apply as regular budget refinance funds are being used. Refer to AN’s 4335 and
Updated Recommendations on Conditional Commitments: Increasing Loan Amounts
and/or Interest Rates Prior to Loan Closing and Changes to Commitment 10/19/09
Approved lenders are responsible for submitting complete and fully underwritten credit
packages. This includes ensuring that all closing costs and fees, taxes, insurance, etc. are
correct. Request for increases in the loan amount or interest rate are time consuming and
take time away from reviewing credit packages, etc. This notice states that requests for
increases to the loan amount after the Conditional Commitment has been issued will not be
processed for changes of $500 or less. Increase requests will not be given priority over
processing credit or application packages. Requests for increases must include updated RD
Form 1980-21, Request for Guarantee, Underwriting Transmittal Summary (1008/1077) and
Application (URLA) and must be submitted by the approved lender.
Rural Development is only obligated to issue a Loan Note Guarantee for the loan amount
indicated on the Conditional Commitment. Also, loans cannot be closed prior to issuance of
the Conditional Commitment. Rural Development is not obligated to issue a Loan Note
Guarantee in these cases.
Medical Deductions and Annual Income Calculations -September 17, 2009
Pre-tax medical premiums (medical/dental/vision) cannot be deducted from gross income
New construction/existing dwellings -July 22, 2009
A home that has never been owner-occupied or has been completed less than 12 months is
considered to be new construction. All new construction documents (plans, specs,
inspections, warranty) must be obtained as indicated in AN No 4414 issued January 5, 2009.
1980-D defines an existing dwelling as one that has been completed for more than one year
as evidenced by an occupancy permit or similar document.
Manufactured Homes: Eligible Units – July 22, 2009
Rural Development can finance new manufactured home units that are purchased through
approved dealer-contractors. A manufactured home unit is considered new if the purchase
agreement is dated within 12 months of the date the unit was manufactured. The
manufacture date is located on the factory installed plate. Manufactured homes with a
manufacture date over 12 months from the purchase agreement date are ineligible for a
guaranteed loan. Approved lenders must retain evidence in their permanent case file of both
the purchase agreement date and the manufacture date.
Best Practices and Tips for Lenders-July 14, 2009
GUS Quality Control Rules-July 9, 2009
Enhancements have been implemented which may require the lender to submit a full doc
(complete credit package) file. The final submission underwriting findings should be printed
by the lender and retained in the permanent case file. The final findings report must be
New Appraisal Requirements-June 26, 2009
Form 1004MC, Market Conditions Addendum to the Appraisal Report, must be included for all
appraisals ordered as of July 1, 2009.
MAXIMUM INTEREST RATE
Information was previously provided in both the February 25, 2009 and June 1, 2009 newsletters and
also in the September 9, 2008 SFH Origination News.
Item #10 on Form 1980-21, Request for Guarantee, must be fully completed. If the interest rate is
“floating to close”, documentation must be included in the closing package to confirm the date the
rate was locked and the method of rate selection (Fannie Mae or VA rate). If the VA rate is used, the
lender must submit a copy of their rate sheet.
We are still receiving many files where either the rate is locked but the date is not provided in #10 of
Form 1980-21 or it is floating and the lock confirmation is not provided.
Loans closed at an interest rate higher than the maximum allowed per 1980.320 cannot be
guaranteed. A temporary waiver for Minnesota Housing Finance Agency (MHFA) loans had been
obtained but this has expired. No further waivers can be obtained.
LENDER TIPS/BEST PRACTICES
To assist us in improving turnaround times for both Conditional Commitments and Loan Note
Guarantees, please submit all required items at one time. Trailing documents and multiple
submissions delays processing. Also, lenders must provide complete contact information with both
credit and closing packages so documents are delivered to the correct person and address.
Only complete and fully underwritten files are to be submitted. We cannot complete a GUS
file until the application is final in GUS.
Form 1980-21, Request for Guarantee, continues to be submitted incomplete or unsigned.
Items most often incomplete or incorrect: Lender ID, #5 regarding credit history and #10
regarding interest rate. Must be signed and dated by lender and borrower.
If a loan is cancelled after the Conditional Commitment is issued, notify us immediately.
Closing packages: A copy of the mortgage is NOT required.
1. Rural Development regulation 1980-D and Administrative Notices can be found at:
2. 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:
3. Rural Development National Office website: www.rurdev.usda.gov/rhs. Click on Guaranteed
Home Loan Opportunities. Agency and program information available.
4. 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.
5. For current turn times: http://www.rurdev.usda.gov/mn/SFH/Participating%20Lender.htm
6. GUS and program training available on USDA Linc: https://usdalinc.sc.egov
1) Select “RHS LINC Home” 2) Select “Training & Resource Library”
7. MN contacts for guaranteed housing loans
Patti Walker 651-602-7807 email@example.com
Peter Lundquist 651-602-7782 firstname.lastname@example.org
Linda Behrendt 651-602-7797 email@example.com
Jaci Betcher 651-602-7803 firstname.lastname@example.org
Sarah Yncierto 651-602-7823 email@example.com
Tanya Roberts 651-602-7794 firstname.lastname@example.org
Jackie Lawrence 651-602-7792 email@example.com
Robert Falk 651-602-7753 firstname.lastname@example.org
Tom DeCrans 651-602-7790 email@example.com
Fax number: 651-602-7825 (the 602-7827 fax number is no longer in use)
Email: firstname.lastname@example.org for credit packages and inquiries
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