Direct Single Family Housing Loans and Grants

Through this action, Rural Housing Service (RHS) is addressing the following: The Agency is revising the minimum insurance deductible amount and removing specific dollar limits with regards to insurance deductible clauses. The Agency also is clarifying the amount of dwelling coverage required to address current standards in the mortgage insurance industry and the coverage that the Agency may obtain when force-placed insurance is required. The intended effect is to make it easier for new homeowners to secure affordable insurance coverage and give the Agency sufficient flexibility to quickly react to changes in insurance costs and requirements. This action also is revising the applicant net asset limitation to increase it from $7,500 to $15,000 for non-elderly families and from $10,000 to $20,000 for elderly families. The intended effect is to require applicants to contribute a downpayment when their net assets exceed the stated limits. These limits have not been updated in over 10 years. Finally, this action updates the rural area definition to reference the effective date of census data collected through 2010. This rule combines three actions under one notice. In the event that we receive adverse comments on any one section of this rule, we will proceed with the final implementation of the other portions not affected. No adverse comments are anticipated.