I know the U.S. Department of Agriculture – Rural Development office I work with has a long processing waitlist for 502 Direct applications and I’m concerned my packaged loans will stale before loan officers can even get to them. How do I turn in a packaged loan and ensure the documents are still good?  

Sincerely, Timing is everything

Dear Timing is everything,

This is a tough issue but luckily there are a couple of things that will help. First, make sure that the application package is complete and that all of the paystubs, bank statements and other verifications you submit with the application are as up-to-date as possible at the time you submit. Second, there is Priority Processing! Rural Development gives processing priority to applicants who have a serious need for immediate assistance, and for loans that benefit the Agency. Applicants with higher priorities must be processed before those with lower priorities. Rural Development has identified priority categories and your packaged application is in the fourth priority position:

1. First Priority: Subsequent Loans to Correct Health and Safety Hazards
2. Second Priority: REO Property or Transfer of Agency-Financed Property
3. Third Priority: Hardships
4. Fourth Priority: Loans that Bring in Additional Resources

In order to use the Agency’s limited resources most effectively, applicants who obtain part of their funding elsewhere through a leveraging arrangement, who contribute sweat equity through an Agency-approved Mutual Self-Help project, or who submit their application through the certified loan application packaging process via an Agency-approved intermediary will receive fourth priority.

For a full description of each category or for further reference, see HB-1-3550 Paragraph 3.13 Selecting Applications for Processing.

This means your application will get processed before unpackaged loans and usually within a timeline that won’t allow your verifications to go stale.

Sincerely, Sher

Dear Sher is a regular Self Help Builder News feature. If you have a question you would like answered or researched by Sher, please send it to asisco@rcac.org and your question may be featured in a future publication