Updated July 10, 2020 — USDA Rural Development has taken a number of immediate actions to help rural residents, businesses, and communities affected by the COVID-19 outbreak. Rural Development will keep our customers, partners, and stakeholders continuously updated as more actions are taken to better serve rural America. Please bookmark this page and check back regularly as circumstances are changing daily and the width and depth of our responses to your questions and concerns will certainly increase. A PDF of all Immediate Actions to date is available in English and Spanish, and below you will find in-depth information on the immediate actions we are taking separated by program area.
Immediate Opportunities for RD Customers Impacted by COVID-19
Actions Taken by USDA Rural Development to Help Rural Residents, Businesses, and Communities Impacted by the COVID-19 Pandemic
- Business & Industry CARES Act Program PDF (English) | PDF (Español)
- Rural Business Development Grant COVID-19 Fact Sheet PDF (English) | PDF (Español)
- Rural Energy for America Program COVID-19 Fact Sheet PDF (English) | PDF (Español)
- Single-Family Housing Direct Loan COVID-19 Fact Sheet PDF (English) | PDF (Español)
- Community Facilities Direct Loan & Grant COVID-19 Fact Sheet PDF (English) | PDF (Español)
- Community Facilities Direct Loan & Grant Loan Deferral COVID-19 Fact Sheet PDF (English) | PDF (Español)
- Single-Family Housing Guaranteed Loan COVID-19 Fact Sheet PDF (English) | PDF (Español)
- Multi-Family Housing Direct Loan COVID-19 Fact Sheet PDF (English) | PDF (Español)
- Distance Learning and Telemedicine COVID-19 Fact Sheet PDF (English) | PDF (Español)
- Water and Environmental Programs COVID-19 Fact Sheet PDF (English) | PDF (Español)
- Interagency Housing Forbearance COVID-19 Fact Sheet - Borrowers PDF
- Interagency Housing Forbearance COVID-19 Fact Sheet - Lenders PDF
- Telehealth Service Changes COVID-19 Fact Sheet PDF (English) | PDF (Español)
Single-Family HousingMutual Self-Help Housing Technical Assistance Grants:
- USDA issued guidance on March 20, 2020, about steps the Department is taking to help you continue to successfully operate the Self-Help Program.
- USDA is working with Self-Help Program grantees, funding partners, real estate professionals and other interested stakeholders to maintain excellent customer service, while prioritizing the safety of our customers and staff.
- Among other guidance, the announcement included limiting workers at the building site to family members or small groups of 10 or less. The announcement discouraged volunteer labor outside of immediate household members, especially for higher-risk populations. Rural Development (RD) acknowledged this alternative method of construction had the potential to delay construction and noted that impacted grantees could make requests for amendments and time extensions in accordance with RD Instruction 1944-I, 1944.420 as early as practical.
- Self-Help grantees seeking amendments, time extensions, and refunding will be evaluated on a case-by-case basis on factors such as Lower Rates of Production, Equivalent Units (EUs) and Technical Assistance (TA) cost per EU. Grantee organizations must work with their regional Technical and Management Assistance (T&MA) Contractors to develop realistic extension requests and applications for refunding. The T&MA Contractors are aware of the potential for needed flexibilities and are ready to assist in any way they can. Please contact Rural Development and Regional Technical and Management Assistance contractor staffs so that we may offer additional assistance.
- For organizations utilizing Self-Help Opportunity Program (SHOP) funds, the following information was provided by HUD in a letter dated May 5, 2020: “In terms of program policy guidance, the Office of Rural Housing and Economic Development staff will work with grantees to offer flexibility on some reporting requirements as well as provide program/project extensions based on the individual grantee’s request relating to specific grant activities, in accordance with the terms of each executed grant agreement. HUD’s decisions will be made on a case-by-case basis as a result of the merits of the individual grantee’s request and the grant agreement terms.”
- Furthermore, HUD published the FY2020 SHOP NOFA on Grants.gov on June 18, 2020 with an application deadline of August 18, 2020.
Effective June 19, with the exception of vacant or abandoned dwellings, foreclosures and related evictions for borrowers with USDA single family housing Direct and Guaranteed loans are suspended through August 31, 2020.
Direct Loan Program:
- USDA has waived or relaxed certain parts of the application process for Single-Family Housing Direct Loans, including site assessments, and has extended the time period that certificates of eligibility are valid.
- A Direct Loan borrower who is experiencing a reduction of income can request a Payment Assistance package to see if he/she is eligible for payment assistance or for more assistance than currently received
- Moratorium assistance for up to 180 days (total of 1 year) is available for Direct Loan borrowers experiencing financial hardship due, directly or indirectly, to the COVID-19 emergency. You can call us and verbally request a payment moratorium. Borrowers have the option to cancel the moratorium at any time or request the moratorium be extended up to an additional 180 days. At the end of the 1-year time period, these 502 Direct borrowers can request the moratorium be extended up to an additional year making it a total of 2 years. However, the borrower must submit a moratorium application and meet eligibility criteria to be granted that last year.
- Direct Loan questions should be directed to USDA’s Customer Service Center at 800-414-1226. Beginning July 6, 2020, regular hours are from 7 a.m. to 5 p.m. Monday through Friday Central Time (CT).
Guaranteed Loan Program:
- Extension of Temporary Exceptions: The temporary exceptions issued on March 27, 2020 pertaining to appraisals, repair inspections and income verifications for the Single Family Housing Guaranteed Loan Program (SFHGLP) due to the COVID-19 pandemic have been extended until August 31, 2020 and apply to the requirements in the program handbook HB-1-3555 for new loans, described below.
- Residential Appraisal Reports – Existing Dwelling: —For purchase and non-streamlined refinance transactions, when an appraiser is unable to complete an interior inspection of an existing dwelling due to concerns associated with the COVID-19 pandemic, an “Exterior-Only Inspection Residential Appraisal Report”, (FHLMC 2055/FNMA 2055) will be accepted. In such cases, appraisers are not required to certify that the property meets HUD HB 4000.1 standards. The appraisal must be completed in accordance with the Uniform Standards of Professional Practice (USPAP) and the Uniform Appraisal Dataset (UAD). This exception is not applicable to existing manufactured housing pilot program, new construction properties, or construction to permanent loans. As a reminder, appraisals are not required for streamlined and streamlined-assist refinance transactions.
- Repair Inspections – Existing Dwelling:: Loans for which a completion certification is not available due to issues related to the COVID-19 pandemic, a letter signed by the borrower confirming that the work was completed is permitted. Lenders must also provide further evidence of completion, which may include photographs of the completed work, paid invoices indicating completion, occupancy permits, or other substantially similar documentation. All completion documentation must be retained in the loan file. This exception is not applicable to rehabilitation and repair loans noted in section 12.28 of HB-1-3555.
- Verbal Verification of Employment::Lenders should use due diligence in obtaining the most recent income documentation to verify the borrower’s repayment ability prior to closing. When the lender is unable to obtain a Verbal Verification of Employment (VVOE) within 10 business days of loan closing due to a temporary closure of the borrower’s employment, alternatives should be explored. For example, email correspondence with the borrower’s employer is an acceptable alternative to a VVOE. If the lender is unable to obtain a VVOE or acceptable alternative, the requirement will be waived when the borrower has a minimum of 2 months cash reserves. In the case of a reduction pf income, the borrower’s reduced income must be sufficient to support the new loan payment and other non-housing obligations. Borrower’s with no income or those receiving unemployment benefits at the time of closing are not eligible for SFHGLP loans regardless of available cash reserves.
- Frequently Asked Questions (FAQs): : Additional FAQs related to the origination and servicing of USDA Single Family Housing Guaranteed loans have been added to the previously posted FAQs. The revised document has been posted to the USDA LINC Training and Resource Library. Questions regarding program policy and this announcement may be directed to the at National Office Division (202) 720-1452.
- Expiration of Temporary Exceptions: These temporary exceptions are in effect until Aug. 31, 2020.
- To implement and align with the provisions of the CARES Act:
- Effective immediately upon receiving a request for a forbearance from a borrower who attests to financial hardship directly or indirectly caused by COVID-19, lenders shall provide immediate forbearance of the borrower’s guaranteed loan payment for a period of up to 180 days. In addition, the initial forbearance period may be extended up to an additional 180 days at the borrower’s request.
- During the forbearance options outlined above, no accrual of fees, penalties or interest may be charged to the borrower beyond the amounts calculated as if the borrower had made all contractual payments in a timely fashion.
- Upon completion of the forbearance, the lender shall communicate with the borrower and determine if the borrower is able to resume making regular contractual payments. If so, the lender shall offer the borrower a written re-payment plan to resolve any amount due or at the borrower’s request, extend the loan term for a period that is at least the length of the forbearance.
- If the lender determines the borrower is financially unable to resume making contractual payments at the end of the forbearance, the borrower shall be evaluated for all available options presented in the Loss Mitigation Guide which is found at Attachment 18-A in Chapter 18 of our 3555 Technical Handbook: https://www.rd.usda.gov/sites/default/files/3555-1chapter18.pdf.
- Effective period: Lenders may approve the initial 180-day COVID-19 Forbearance no later than October 30, 2020.
- Guaranteed Loan servicing questions should be directed to: firstname.lastname@example.org.
- For more information, visit the following web pages:
- SFHGLP Lending Partner Webpage: https://www.rd.usda.gov/page/sfh-guaranteed-lender
- SFHGLP webpage: https://www.rd.usda.gov/programs-services/single-family-housing-guaranteed-loan-program
- USDA LINC Training and Resource Library: https://www.rd.usda.gov/programs-services/lenders/usda-linc-training-resource-library
- Procedure Notices: https://www.rd.usda.gov/resources/directives/procedures-notices
- Sections 4023 and 4024 of the CARES Act apply to the Multifamily Direct and Guaranteed portfolios.
- The CARES Act allows Multifamily borrowers to request forbearance if they are experiencing financial hardship due to COVID-19. Multifamily Housing has existing authority in 7 CFR §3560.453to take special servicing actions as part of a workout plan on Section 514 and 515 loans to prevent a default, and under that authority will approve a deferral of up to 3 monthly loan payments. For your convenience, attached is a sample streamlined workout agreement proposal that MFH considers to be in compliance with the requirements of 7 CFR §3560.453(c). Borrowers are welcome to use that sample or submit your requests orally or in another written format to your assigned Multifamily Servicing Official.
- Once this information is submitted to your assigned Multifamily Servicing Official, within five business days your request will be processed by the field office and sent to the National Finance, Accounting and Operations Center (NFAOC) in St. Louis to adjust your account. If your loan payment is normally offset against your Rental Assistance payment, you will receive your full RA payment without the mortgage payment deducted. If you normally send in a payment, you do not need to do anything further.
- If the initial forbearance period is for less than 90 days, borrowers can request an extension of up 90 days total, but must request the extension at least 15 days prior to the expiration of the initial period. Forbearance can be ended at any time by contacting your assigned Multifamily Servicing Official. Payments will be deferred for up to 90 days without any additional interest or late fees. When the loan reaches maturity, any deferred payments will be added to the final payment.
- Guidance on forbearance requests for a Section 538 loans will be provided later this week.
- The CARES Act prohibits evictions due to non-payment of rent for the next 120 days and does not allow owners to charge late fees or otherwise penalize tenants who are unable to pay rent. This eviction prohibition became effective upon enactment of the CARES Act (March 27, 2020) and is effective for 120 days for Section 514, Section 515 and Section 538 loans, as well as Multifamily voucher holders. As stated in 7 CFR §3560.452(c)(8), failure to comply with this Federal law is considered a non-monetary default.
Multi-Family Housing is taking several steps to help owners, management agents and tenants maintain quality housing during the COVID-19 outbreak. Specifically, three immediate steps are effective for Section 515 Multi-Family properties:
- Tenant certifications due March 31, April 30 and May 31 for Multi-Family properties have been extended to June 30 with no late fees or overage charges, as allowed in Multi-Family guidance (HB-3-3560, Chapter 4, Section 4.11). This extension will allow for additional time to complete needed certifications while avoiding face-to-face meetings as recommended by the Centers for Disease Control and Prevention (CDC).
- Late fees on Section 515 mortgages will be waived, subject to waiver authority in 7 CFR 3560.403 (c)(3).
- Section 515 Annual Financial Statements due March 31 will be extended 30 days, as per Multi-Family guidance (HB-2-3560 Chapter 4, Section 4.16-H). USDA is exploring whether a longer extension is appropriate and will provide further guidance.
- Current policy states that owners must process an interim recertification at the tenant’s request if there is a change in income of $50 or more per month. The owner should already have this policy in writing and apply it consistently. To the maximum extent possible, we encourage all owners to work with all tenants with impacted income to adjust rent payments.
- USDA encourages all owners to work with impacted residents and families to adjust rent payments, enter into forbearance agreements, and lessen the impact on affected residents. At this time, no additional subsidy funding has been made available. If borrowers are temporarily unable to make loan payments, the Agency may waive late fees and enter into an official workout plan.
USDA announced forbearance guidelines for the Multifamily Housing Guaranteed Loan Program as it applies to the Section 4023 of the CARES Act. Guidelines are as follows:
For Forbearance of Standalone Section 538 Loans:
- Lender fees should be reasonable and related to the drafting of the agreement. $750 is considered reasonable for these purposes.
- The forbearance amount should be tailored to address the borrower’s stated financial hardship. Any additional interest charged is negotiated between the lender and borrower but should not be higher than the note interest rate.
- Distributions should not be taken while a project is under forbearance agreement or during any repayment period.
- If the Section 538 loan was sold to the Government National Mortgage Association (GNMA), repayment of forbearance must comply with the lender’s securitization agreement with GNMA.
For Forbearance of Section 538 Loans with Subordinate Section 515 Loan(s):
- The above guidance for standalone Section 538 loans applies.
- The lender should confirm with the borrower and USDA whether the borrower has received forbearance on the subordinate Section 515 loan(s).
- If the borrower has received forbearance on their Section 515 loan, the lender should include this in its calculation of needed Section 538 forbearance.
- If the borrower has not received forbearance on their Section 515 loan, the lender should have the borrower contact their Multifamily Servicing Official to discuss forbearance in order to accurately assess the financial hardship caused by the public health crisis.
- If the borrower requires forbearance of their Section 538 loan, the lender may enter into a repayment plan with the borrower. The forbearance repayment plan will be considered an allowable expense in the Section 515 budget per Handbook 2-3560, Attachment 4-C.
Completed forbearance agreements must be sent to Adam.Hauptman@USDA.gov.
- Effective May 12, 2020, through September 30, 2020, the USDA Community Facilities Direct Loan Program will temporarily allow borrowers with direct loans to request payment deferrals to assist those that are experiencing temporary cash flow issues due to the pandemic.
- On a case-by-case basis, USDA will provide the option of principal and interest payment deferrals to borrowers impacted by COVID-19 for up to one year due to hardship. The borrower must request any payment deferments from the Agency in writing.
- For additional information, please see page 22009 of the April 21, 2020, Federal Register.
Rural Utilities Service
USDA is waiving RUS borrower covenant requirements for loan agreement financial ratios for the period from Jan. 1, 2020 through Dec. 31, 2020. Additionally, USDA is waiving all financial reporting requirements associated with existing Rural Utilities Service (RUS) loan and grant covenants beginning Jan. 1, 2020 through June 30, 2020.
ReConnect Pilot Program
- The CARES Act provided $100 million in additional funding to the program. USDA received 11 round two ReConnect Program applications that are eligible for this funding.
- Rural Development was provided an additional $25 million in the CARES Act for the Distance Learning and Telemedicine grant program. USDA issued a stakeholder announcement on April 14 on the funding. Telecommunications and Electric
- On March 20, 2020, USDA extended for 60 days the deadline for Telecommunications and Electric Program borrowers and grantees to submit their annual CPA audit. In most cases, such audits are due to the agency by April 30, 2020.
- USDA is waiving borrower covenant requirements for loan agreement financial ratios for the period from Jan. 1, 2020 through Dec. 31, 2020. Additionally, USDA is waiving all financial reporting requirements associated with existing Rural Utilities Service (RUS) loan and grant covenants beginning Jan. 1, 2020 through August 31, 2020.
- The RUS Administrator has delegated authority to the RUS Telecommunications, Electric, and Water and Environmental Programs to consider requests to waive certain site inspection requirements during the current COVID-19 National Emergency.
- Applicants will be able to use alternative methods to notify the public, such as through videoconferences, teleconferences and public notices on websites and in local newspapers, as a substitute for the public meeting notification requirement for water and waste projects.
- On a case-by-case basis, USDA will help Electric Program borrowers gain access to obligated funds more quickly at current low interest rates by considering extensions of loan terms (within statutory limits); considering requests to move obligated funds between the Electric Program’s six budget purposes where the new purpose has cleared environmental review; and by considering Temporary Normal Inventory (TNI) requests.
- For assistance, please contact:
- Electric Program: Christopher McLean, Christopher.email@example.com, 202-407-2986
- Telecommunications Program: Laurel Leverrier, firstname.lastname@example.org, 202-495-9142
- Water and Environmental Programs: Edna Primrose, email@example.com, 202-494-5610
Rural Business-Cooperative ServiceBusiness & Industry (B&I) CARES Act Program
Effective May 22, 2020, USDA is making available up to $1 billion in loan guarantees to help rural businesses meet their working capital needs during the coronavirus pandemic. Additionally, agricultural producers that are not eligible for USDA Farm Service Agency loans may receive funding under USDA Business & Industry (B&I) CARES Act Program provisions included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
In addition to expanding eligibility to certain agricultural producers, the changes allow USDA to:
- Provide 90 percent guarantees on B&I CARES Act Program loans;
- Set the application and guarantee fee at two percent of the loan;
- Accept appraisals completed within two years of the loan application date;
- Not require discounting of collateral for working capital loans, and Extend the maximum term for working capital loans to 10 years.
B&I CARES Act Program loans must be used as working capital to prevent, prepare for or respond to the effects of the coronavirus pandemic. The loans may be used only to support rural businesses, including agricultural producers, that were in operation on Feb. 15, 2020.
USDA intends to consider applications in the order they are received. However, the Department may assign priority points to projects if the demand for funds exceeds availability.
USDA announced the expanded B&I authorities in a notice published on page 31139 of the May 22 Federal Register. The Department will begin accepting applications for B&I loan guarantees on May 22, 2020. Applications must be received no later than midnight Eastern Daylight Time on September 15, 2021, or until funds are expended. Program funding expires Sept. 30, 2021.Additional Guaranteed Programs
Effective March 31, 2020, until September 30, 2020, lenders may offer 180-day loan payment deferrals without prior agency approval for Rural Energy for America Program Loan Guarantees. For additional information, see page 17721 of the March 31, 2020, Federal Register.
On April 8, 2020, USDA expanded upon the deferral flexibilities it announced March 31, 2020. Guaranteed lenders may also approve and make covered loans under the provisions of Section 1102 of the CARES Act. Section 1102 pertains to the Small Business Administration’s Paycheck Protection Program.
The expanded notice provides that guaranteed lenders may also approve and make covered loans under the provisions of Section 1102 of the CARES Act. Section 1102 pertains to the Small Business Administration’s Paycheck Protection Program.
On April 24, 2020, USDA provided guidance on the resources provided in the Paycheck Protection Program and Health Care Enhancement Act (HR.266) recently passed by Congress and signed into law by President Trump.
- USDA’s guaranteed Business & Industry, Rural Energy for America Program (REAP) programs may approve and make covered loans under the PPP. Guaranteed lenders must notify USDA Rural Development in writing of any covered loans made under the PPP. Written notification will meet the standard for concurrence until Sept. 30, 2020.
- RBCS intermediary borrowers continue to have authority to service loan portfolios independent of USDA. Intermediary borrowers participating in these programs may approve loan payment deferrals for their borrowers without USDA approval. These programs are:
- Intermediary Relending Program (IRP)
- Rural Business Development Grant (RBDG)
- Rural Economic Development Loan and Grant (REDL and REDG)
- Rural Microentrepreneur Assistance Program (RMAP)
- For existing Intermediary Relending Program (IRP) and Rural Economic Development Loan (REDL) borrowers, the Agency is committed to maintaining well-capitalized intermediary lenders and will work with intermediaries on loan servicing requests on a case-by-case basis to make sure they remain a pillar in our rural business communities.
- USDA is making $5.8 million in grants available under the Rural Cooperative Development Grant (RCDG) program to help improve economic conditions in rural areas. Nonprofit corporations and institutions of higher education are eligible to apply to provide technical assistance to individuals and rural businesses.
- Fiscal year 2019 award recipients who received a grant period extension due to a loss of operations as a result of the coronavirus pandemic are eligible to apply for fiscal year 2020 funding.
- Electronic applications must be submitted to grants.gov by midnight Eastern Time on August 3, 2020. Additional information is available on page 39870 of the July 2 Federal Register.
USDA is extending the application window for the following programs:
Rural Business-Cooperative Service
- USDA extended the application deadline for the Rural Business Development Grant (RBDG) program to no later than April 15, 2020. Contact the Rural Development office for the deadline in your state. USDA announced the extension in an Unnumbered Letter posted March 19, 2020.
- USDA extended the application deadline for the Rural Energy for America Program (REAP) to April 15, 2020. For additional information, see page 16925 of the March 25, 2020, Federal Register.
Rural Utilities Service
USDA is waiving RUS borrower covenant requirements for loan agreement financial ratios for the period from Jan. 1, 2020 through Dec. 31, 2020. Additionally, USDA is waiving all financial reporting requirements associated with existing Rural Utilities Service (RUS) loan and grant covenants beginning Jan. 1, 2020 through Aug. 31, 2020.
- USDA extended the application deadline for the ReConnect Pilot Program to April 15, 2020. For additional information, see page 17530 of the March 30, 2020, Federal Register.
- USDA is opening a second application window for funding under the Distance Learning and Telemedicine (DLT) grant program. Electronic applications for window two may be submitted through grants.gov beginning April 14, 2020, and are due no later than July 13, 2020. Paper applications will not be accepted under the second window. Additional information on how to apply will be available on grants.gov on April 14.
- USDA opened a second application window for funding under the Distance Learning and Telemedicine (DLT) grant program. Electronic applications for window two may be submitted through grants.gov beginning April 14, 2020 and are due no later than July 13, 2020. Paper applications will not be accepted under the second window.
- June 23, 2020 - USDA Extends Foreclosure and Eviction Relief on Single Family Housing Direct Loans
- June 19, 2020 - USDA Extends Foreclosure and Eviction Relief on Single Family Housing Guaranteed Loans
- May 22, 2020 - USDA to Provide $1 Billion in Loan Guarantees for Rural Businesses and Ag Producers
- May 4, 2020 - USDA Outlines Telehealth Service Changes as a Result of the COVID-19 Pandemic
- April 28, 2020 - USDA Leadership from Farm Production And Conservation and Rural Development Update Stakeholders On Accessing SBA Relief Programs
- April 17, 2020 - USDA Offers Temporary Payment Deferrals for the Community Facilities Direct Loan Program
- April 14, 2020 - USDA Opens Second Application Window for Distance Learning and Telemedicine Grant Program Funding
- April 8, 2020 - Temporary Exceptions to Payment Deferrals for Agency Guaranteed Loan Programs
- March 31 - Payment Deferrals for Agency Guaranteed Loan Programs
- March 30 - Temporary exceptions pertaining to appraisals, repair inspections and income verification for the Single-Family Housing Guaranteed Loan Program (SFHGLP)
- March 20 - USDA Rural Utilities Service (RUS)
- March 20 - USDA Rural Business-Cooperative Service (RBCS)
- March 20 - Single-Family Housing Direct Loan and Grant Programs
Frequently Asked Questions
Below are frequently asked questions that we have addressed. This list will certainly grow as new questions are asked and answers are given and even updated as circumstances dictate.
Q: I am concerned that the COVID-19 outbreak could cause me to fall behind on my Single Family Housing Direct Loan payments from USDA’s Rural Development. What assistance can USDA provide those of us with these loans who are affected by the outbreak?
A: In support of the response efforts to the Presidentially declared COVID-19 National Emergency, USDA has placed a foreclosure and eviction moratorium on all USDA Single Family Housing Direct (SFHD) and Single Family Housing Guaranteed Loans (SFHG) loans for 60 days effective 3/19/2020.
Under the moratorium, foreclosures on borrowers with USDA SFHD loans will be completely suspended. Likewise, USDA approved lenders participating in the SFHG program have been authorized to suspend foreclosures for 60-days.
Similarly, evictions of persons from properties secured by USDA SFHD and SFHG loans are also suspended for a period of 60 days.
Q: What options are available to support Single-Family Housing Guaranteed Loan borrowers impacted by COVID-19?
A: An initial six-month forbearance is available for Single-Family Housing Guaranteed Loan borrowers impacted by COVID-19. At the borrower’s request, this forbearance can be extended an additional six months for a maximum of 12 months.
Q:My insurance premium is currently being escrowed through my USDA Single-Family Home mortgage payment. Is my insurance premium being paid in a timely manner?
A:USDA is continuing to process hazard and flood insurance premiums in a timely manner. Insurance payments should be sent to:
USDA Rural Development NFOAC
PO Box 66876
St Louis, MO 63166
Q:How can I reach RD’s Single-Family Housing Direct Customer Service Center for assistance?
A:The Customer Service Center is experiencing high call volumes during the COVID-19 pandemic. The call center has expanded its hours from 7 a.m. to 7 p.m. Central Time Monday through Friday and 8 a.m. to 1 p.m. Central Time on Saturdays.
Q: How can owners and management agents assist tenants who experience a reduction in income due to COVID-19?
A: For tenants receiving Rental Assistance, an interim recertification should be completed as quickly as possible. We encourage agents to be accurate but flexible, including receiving information by phone or email, and making accommodations when income changes can’t be verified due to business closures.
Given the high number of potential zero-income certifications, we are suspending Handbook 2-3560 Attachment 6-B used to verify living expenses for zero income interim recertifications. Tenants who have been laid off due to COVID-19 do not qualify for income annualization as mentioned in Handbook 2-3560 Chapter 6 Section 6.9 (4), as this emergency is not a seasonal or predictable layoff. Rent should be calculated based on current income.
For tenants not receiving Rental Assistance, the CARES Act signed on March 27, 2020, suspends evictions for nonpayment for a 120 day period, and restricts owners and management agents from charging late fees or otherwise penalizing tenants who are unable to pay rent. We encourage owners to be as flexible as possible with tenants during this time.
Q: The CARES Act provides recovery payments, up to $1,200 for individuals, and $500 per qualifying child. Should these amounts be included in tenants’ income?
A: No. These payments are refundable tax credits on an individual’s 2020 taxable income that are being paid in advance. Do not include these payments when recertifying a tenant’s income.
Q: What if a Multifamily Section 514, 515, or 538 borrower experiences financial hardship due to COVID-19 and is unable to make their mortgage payment?
A: The 2020 CARES Act allows Multifamily borrowers experiencing a financial hardship due, directly or indirectly, to the COVID–19 emergency forbearance for up to 90 days. To qualify, the borrower must have been current on its payments as of February 1, 2020. Separate communication was distributed on forbearance on April 2, 2020, but Section 514 and 515 owners may reach out to their servicing official for information on how to request a forbearance.
Q: Can property owners and agents use property or reserve funds to alleviate financial hardship caused by non-payment of rent by residents having trouble because of COVID-19?
A: Yes. For Section 514 and Section 515 properties (see Handbook 2-3560, Chapter 4, Section 3), borrowers may utilize property operating accounts or make an authorized withdrawal of funds from a reserve account to meet an emergency shortfall in operating expenses when the emergency is beyond the control of the borrower and threatens life, safety, or the physical security of the project. Properties should reach out to their assigned Servicing Official if they anticipate needing reserve funds to pay operating expenses.
For properties with a Section 538 Loan Guarantee, the lender holds the reserves. The lender is required to protect the value of the asset, which includes proper use of reserves to protect the financial interest of the property. The lender has the discretion to use the reserves if it is in the best financial interest of the property (Handbook 1-3565, Chapter 7 Section 7).
Q: What precautions or changes to property operations can management take to promote social distancing and prevent the spread of COVID-19?
A: We encourage owners and management agents to adhere to all state and local guidance with respect to containing the spread of COVID-19. Management may take reasonable precautions, including closing playgrounds, having site staff work remotely, or delaying non-essential maintenance. However, management must not remove tenant access to essential shared amenities like laundry rooms. Access can be changed, for example – management may institute a sign-up for laundry time to ensure social distance is maintained and providing disinfecting wipes to clean the laundry machines.
Q: The CARES Act prohibited late fees and evictions for USDA’s Multifamily Housing tenants for 120 days, expiring July 25. What happens now?
A: The CARES Act was enacted on March 27, 2020 and contained a prohibition on both nonpayment evictions and late fees for 120 days. This prohibition applies to all Rural Development MFH programs, including Section 514, Section 515 and Section 538 loans, as well as Multifamily voucher holders.
This prohibition on late fees remains in place for the period covered by the CARES Act, meaning that if a resident has unpaid rent on August 1, retroactive late fees may not be assessed. Late fees may only be charged going forward. We encourage MFH owners and agents to work with tenants wherever possible to assist them in maintaining housing, including processing interim certifications if possible or arranging payment plans for past-due balances.
In addition, while the national prohibition on nonpayment evictions will lift July 25, many state and local governments have ongoing restrictions. Owners and agents must closely follow any applicable local guidance in this matter. ,/p>
As a reminder, properties under a forbearance/deferral agreement are prohibited from nonpayment evictions through the life of the deferral. For example, if a property requests a deferral for June, July, and August, no nonpayment evictions would be permitted until September 1.
Q: Is USDA still accepting deferral requests in USDA’s Multifamily Housing Programs?
A: The 2020 CARES Act allows Multifamily borrowers experiencing a financial hardship related to COVID–19 to request forbearance for up to 90 days. Guidance on how to request this forbearance/deferral was distributed on April 2, 2020, and we encourage you to contact your Servicing Official with questions.
MFH has processed over 4,000 deferral requests for its 514 and 515 programs.
Forbearance/deferral requests are still being accepted for properties experiencing financial hardship due to COVID-19 that have not yet requested a forbearance. Requests will be accepted as long as the National Emergency is in place or through December 31, 2020. As a condition of a deferral, owners and management agents must not evict tenants for nonpayment of rent through the deferral period.
Q: How can USDA Multifamily Housing owners and management agents assist tenants who experience an ongoing reduction in income due to COVID-19?
A: For tenants receiving Rental Assistance, an interim recertification should be completed as quickly as possible for any changes in monthly income. Tenants who completed a previous interim recertification may need to complete a second interim certification, for example if their unemployment benefits change or if a partial layoff becomes permanent. We encourage agents to be accurate but flexible, including receiving information by phone or email, and making accommodations when income changes can’t be verified due to business closures.
Given the high number of potential zero-income certifications, we have suspended Handbook 2-3560 Attachment 6-B used to verify living expenses for zero income interim recertifications. Tenants who have been laid off due to COVID-19 do not qualify for income annualization as mentioned in Handbook 2-3560 Chapter 6 Section 6.9 (4), as this emergency is not a seasonal or predictable layoff. Rent should be calculated based on current income.
If staff are no longer maintaining office hours, management must ensure tenants have a way to maintain contact, report emergency maintenance issues, and ask questions or request an interim certification. It is strongly recommended that both a phone number and email address are provided to tenants as contact options. Electronic rent payment may be offered as an option, but must not be mandatory and no additional fees may be charged. Digital signatures may be utilized during the recertification process as needed.
Please also remember that properties must consider Reasonable Accommodations to rules any COVID-19 temporary rules to accommodate persons with disabilities, such as if a tenant needs a caregiver assistance the caregiver must be allowed on the property, even if visitors to the property have been restricted.
Q: What financial flexibilities does USDA have available for current Community Facilities Direct Loan Program borrowers?
A: Borrowers under our Community Facilities Direct Loan Program may request up to one year of payment deferrals. Contact your local servicing office for more information.
Q: How is USDA Rural Development’s Community Facilities Program helping guaranteed lenders whose rural borrowers are experiencing cash flow issues as a result of the COVID-19 pandemic?
A: Guaranteed lenders are approved to unilaterally offer payment deferrals to their customers who may be experiencing temporary cash flow issues due to COVID–19. Payments may be deferred for up to 180 days from the date the original payment is due. The lender must notify USDA Rural Development in writing of any payment deferments. In addition, the lender is responsible for servicing the entire loan and for taking all servicing actions that a reasonably prudent lender would perform in servicing its own portfolio of loans that are not guaranteed. This temporary policy expires on September 30, 2020.
Q: Will lenders participating in USDA Rural Development’s Community Facilities Program need prior approval from USDA to make Small Business Administration’s Paycheck Protection Program (PPP) loans to guaranteed borrowers?
A: No, Community Facilities guaranteed lenders do not have to seek prior approval if the lender makes a covered loan under the SBA’s Paycheck Protection Program loan to a borrower. The lender must, however, notify USDA Rural Development in writing after making the covered loan. This temporary policy is in effect until September 30, 2020.
Q: How will USDA use the additional $25 million provided in the CARES Act for the Distance Learning and Telemedicine Grant Program?
A: Congress provided USDA with an additional $25 million for the Distance Learning and Telemedicine (DLT) Program. This funding became available during the DLT application window that began April 14, 2020, and closes on July 13, 2020.
Q: Does USDA provide any type of payment relief for telecommunications borrowers that have been affected by COVID-19?
A: USDA Telecom Program borrowers experiencing financial difficulty due to COVID-19 can reach out to our national office (202-720-9556) or one of our state offices for information on short-term deferrals or payment relief. These requests are evaluated on a case-by-case basis.
Q: What financial flexibilities does USDA have available for current Water and Waste Disposal Program borrowers?
A: Borrowers may request the use of reserve account funds as a short-term solution to a one-time funds shortage. Borrowers in good standing may request short-term deferred, reduced or interest-only payments for up to 180 days.
Q: What training and emergency management resources does USDA have available for Water and Waste Disposal borrowers who are affected by the COVID-19 National Emergency?
A: Technical assistance is available to assess needs, develop workout agreements, develop and/or update risk, resilience and emergency response plans, and to provide financial and utility management training. Under the USDA Circuit Rider Program, personnel can be temporarily provided to systems in need of emergency operators.
Q: Will USDA allow flexibilities for the public meeting notification requirement for water and waste projects?
A: Projects may utilize alternative methods to notify the public, for the public meeting notification requirement for water and waste projects. Such methods may include: videoconferences, teleconferences, and public notices on websites and in local newspapers as a substitute.
Q: Can RUS help electric utility borrowers gain faster access to previously obligated loan funds?
A: The RUS electric program is ready to work with its utility borrowers to speed the release of funds. The agency has announced expedited consideration of requests to move funds from one budget purpose to another to give borrowers quicker access to needed loan funds for projects or uses that have environmental clearance. The agency is also prioritizing consideration of Temporary Normal Inventory (TNI) requests, which also allows borrowers quicker access to their loan funds.
Q: Will revenue losses related to the pandemic be counted against an electric program borrower’s required financial ratios or adversely affect its future ability to borrow from RUS?
A: The agency has announced that it will waive certain 2020 financial ratios to prevent temporary revenue declines due to the COVID-19 pandemic from being the sole reason for a finding of non-compliance or being the sole reason to deny a RUS utilities borrower consideration for a future loan.
Q: Can a lender with a Rural Energy for America Guaranteed Loan offer a deferral for a rural borrower experiencing cash flow issues as a result of the COVID-19 pandemic?
A: Yes. Lenders may offer 180-day loan payment deferrals. Contact your local servicing office for more information.
Q: Can a lender with a Business & Industry Guaranteed Loan offer a deferral for a rural borrower experiencing cash flow issues as a result of the COVID-19 pandemic?
A: Yes. Lenders may offer 180-day loan payment deferrals. Contact your local servicing office for more information.
Q: What does the CARES Act provide for Business and Industry loans under the Rural Business-Cooperative Service?
A: The CARES Act provided funding that enables USDA to provide additional guarantees through the Business and Industry Guaranteed Loan program (B&I). USDA Rural Development is preparing to publish a rule and a Notice of Funding Availability (NOFA) as soon as possible.
Q: What actions can be taken by a lender to cure a defaulted guaranteed B&I loan?
A: There are several options that may be taken by a lender to cure a defaulted guaranteed loan. These include, but are not limited to, deferment of principal and/or interest payments; an additional unguaranteed temporary loan by the lender to bring the account current; reamortization or rescheduling of loan payments; transfer an assumption of the loan; reorganization, liquidation, and changes in interest rates with the Agency’s, the lender’s and any holder’s approval.
Q: Can a lender modify a USDA B&I guaranteed loan after a workout agreement?
A: Yes, a lender may modify loan terms after a workout agreement. The term of any deferment, rescheduling, reamortization or moratorium will be limited to the lesser of the remaining useful life of the collateral or remaining limits. During a period of deferment or moratorium on the guaranteed loan, the lender’s unguaranteed loan(s) and any stockholder loans must also be under deferment or moratorium.
Q: Can a lender have a balloon payment in loan servicing for a loan that is associated with a USDA B&I guarantee?
A: Yes, a lender can have a balloon payment in loan servicing. Balloon payments are permitted as a loan servicing option so long as there is a reasonable prospect for success and the remaining life of the collateral supports the action.
Q: Can a borrower through a Rural Business & Cooperative Service relending program (Intermediary Relending Program, Rural Business Development Grant, Rural Economic Development Loan and Grant, Rural Microentrepreneur Assistance Program) allow payment deferrals for loans provided to ultimate recipients?
A: Yes, borrowers participating in our relending programs may approve loan payment deferrals for their borrowers without prior approval by USDA Rural Development.
Q: How have the Rural Cooperative Development Grant (RCDC) and Socially Disadvantaged Groups Grant (SDGG) programs been affected by COVID-19?
A: USDA Rural Development is preparing to issue a Notice of Funding Availability (NOFA) for these programs. The publications will allow for a 60-day application period. Currently, there is $5.8 million available for RCDG, and $3 million for SDGG. Current recipients are permitted to work with USDA to use available grant flexibilities to complete their projects. This includes a no-cost extension in certain cases.
The CARES Act provided $100 million in additional funding to the ReConnect Program. How will USDA Rural Development distribute this money?
A: USDA will use the $100 million provided for the ReConnect Program in the CARES Act to invest in qualified 100% grant projects that did not receive funding in the program’s first round of ReConnect Program investments.
Round one applicants who did not receive funding due to limited broadband access in their proposed service area may submit an application during the second round to receive this priority.
Q: I have a USDA Rural Development loan or grant. Am I an essential worker? Can I continue to implement USDA funding during stay-at-home orders from my state or local government?
A: USDA does not determine whether or not our customers are essential workers. Customers, please contact your local or state government for more information.