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The Rural Housing Service (RHS) published a proposed rule on January 27, 2023 (88 FR 5275) to amend the current regulation for the Single-Family Housing Guaranteed Loan Program (SFHGLP) regulations found in 7 CFR part 3555.  A 60-day comment period was provided for the proposed rule, which closed on March 28, 2023. RHS received comments from 12 respondents, of which four of the comments were misinterpretations of the rule or not applicable to the contents of the rule. Six of the responses were from individuals, one was a duplicate response, one identified as being a mortgage lender, and the remaining  four comments were from organizations that represent various facets of the real estate finance industry.

The Agency intends to publish a final rule which will amend 7 CFR 3555.301 to adjust the Mortgage Recovery Advance (MRA) process to make it less cumbersome and eliminate documentation and eligibility challenges for borrowers who do not require payment reduction. Currently, the process to administer the MRA options require extensive processing, tracking, and oversight. The expected results of the changes are: (1) To offset the negative effects that delinquencies will have on our Single Family Guaranteed Loan Portfolio. This will allow more families to remain in their homes resulting in fewer loss claims for the Agency; (2) Gives lenders more flexibility in their servicing options; (3) Benefit borrowers and lenders by offering a less expensive and less cumbersome option, creating an environment that supports successful future home ownership. 

The Agency will publish a final rule to amend 7 CFR 3555 to implement changes related to the use of Special Servicing Options for Non-performing Loans. This final rule will benefit borrowers by offering a less cumbersome option to eliminate documentation and eligibility challenges for borrowers who do not require payment reduction and provide lenders more flexibility in their servicing options while reducing program risk of the guaranteed loan portfolio.