USDA Rural Development issued a stakeholder announcement (Announcement) implementing immediate measures to help rural residents, businesses and communities affected by COVID-19. The relief measures affect the Rural Development Guaranteed Loan Programs, including the Rural Housing Service (Single-Family Housing and Multi-Family Housing), the Rural Utilities Service, and the Rural Business-Cooperative Service.
Relief for Single-Family Housing Direct Loan Program borrowers includes the waiver and relaxation of certain parts of the application process, including site assessments, and extends the time period that certificates of eligibility are valid. Borrowers experiencing a reduction in income (by more than 10%) may also request a payment assistance package to see if the borrower is eligible for payment assistance or for more assistance than currently received. In addition, Moratorium Assistance is available for Direct Loan borrowers experiencing medical bill expenses or job loss.
Single-Family Housing Guaranteed Loan Program (SFHGLP) borrowers with a documented hardship may have their payments reduced or suspended for up to 12 months. Once the hardship is resolved a lender may modify the loan to cure the delinquency. The Announcement also grants SFHGLP lenders temporary exceptions to appraisals, repair inspections and income verification. In addition, to align the SFHGLP with the CARES Act, lenders must immediately grant forbearance (up to 180 days) to borrowers attesting to a COVID-19 financial hardship. The forbearance period may be extended to an additional 180 days at the borrower’s request.
In addition, all borrowers with USDA single-family housing Direct or Guaranteed loans are subject to a moratorium on foreclosure and eviction for a period of 60-days.
