In the May 3, 2016, issue of the Federal Register (81 FR 26461, click here) the Rural Housing Service (RHS) re-issued a final rule amending its Single Family Housing Guaranteed Loan Program regulations in 7 CFR Part 3555 to provide that a loan guaranteed by RHS is a Qualified Mortgage if it meets certain requirements set forth in 12 CFR 1026.43(e) of Regulation Z. The final rule adds new §3555.109 providing for an RHS qualified mortgage, as set forth below: § 3555.109 Qualified mortgage. A qualified mortgage is a guaranteed loan meeting the requirements of this part and applicable Agency guidance, as well as the requirements in 12 CFR 1026.43(e)(2)(i) through (iii) and 12 CFR 1026.43(e)(3). An extension of credit made pursuant to a program administered by a State Housing Finance Agency is exempt from this requirement as defined in 12 CFR 1026.43(a)(3)(iv). Lenders will be allowed to cure unintentional errors and retain the qualified mortgage status if the conditions set in 12 CFR 1026.31(h) are met. This memorandum replaces the firm’s two memorandums dated March 31, 2016, regarding the RHS qualified mortgage rule originally published in error in the March 31, 2016, issue of the Federal Register (81 FR 18456). The final rule becomes effective June 2, 2016. In the final rule, the RHS also is amending its Single Family Housing Guaranteed Loan Program by (i) expanding its lender indemnification authority for loss claims in the case of fraud, misrepresentation, or noncompliance with specified loan origination requirements (§3555.108(d)); and (ii) amending its refinancing provisions to require that the new interest rate not exceed the interest rate on the original loan and to add a new streamline-assist refinance option (§§3555.10 and .101(d)(3)(i), (ii) and (iv)).
