The last holdout- USDA- will be requiring the 1004MC addendum to the appraisal on all Rural Development loans effective July 1, 2009. Up to now they were the only loan program to not require it so the news certainly doesn't come as a surprise.
The memo from USDA states files in process prior to that date can be submitted without the 1004MC until July 31, 2009. After that all files must include the addendum. Personally I have not seen any negative impact from the inclusion of the addendum on FHA and VA loans, so I expect no negative repercussions from the USDA as well.
In a seperate memo the USDA advises changes coming for the GUS automated underwriting system that will require full package submissions on some GUS approved loans. What I have heard is that credit explanations for certain situations such as bankruptcies will be required even if the 620 "streamline" credit score threshold is surpassed. Again, it's not really tightening as much as conforming with other loan programs in an effort to keep the loan quality were it needs to be.
Defaults on Rural Development loans, although rising, are still below FHA levels and considering the loan requires no down payment that is great news!
Gerry Suarez, Jr.
Your FHA Loan Pro!
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Great update! I have been doing more of these loans lately. I have recently had loans submitted to GUS come back as a refer due to scorecard. GUS previously approved similar loans with the same credit scores/dti. Any idea if they are already making changes to GUS?