Big Changes Come to Rural Housing Program

[Brian Gibbons]

An agency within the Department of Agriculture that promotes housing in rural areas is revamping its loan guarantee program to make it more attractive to lenders.

Originating loans through the Rural Housing service has traditionally been a time-consuming process, and many lenders tend to focus on other products that make up a larger piece of their portfolios. In fiscal year 2014, RHS guaranteed 139,000 loans totaling $19 billion.

But the agency is trying to increase that number. The service is upgrading its technology to expedite loan processing to save lenders time and money. And under regulations that went into effect Dec. 1, lenders can charge a higher interest rate on RHS-guaranteed loans, and more banks can participate. Now, any federally regulated depository institution can be an RHS-approved lender.

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