UPDATED: USDA institutes measures to help rural communities, businesses affected by COVID-19

Wednesday, April 1, 2020

WASHINGTON – The U.S. Department of Agriculture Rural Development agency implemented several actions to assist rural residents, businesses and communities impacted by the new coronavirus pandemic, the agency announced March 25.

On April 8, USDA expanded upon the deferral flexibilities it announced previously. 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.

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. Guaranteed lenders must notify USDA Rural Development in writing of any covered loans made under Section 1102 of the CARES Act. Written notification will meet the standard for concurrence until Sept. 30, 2020. After Sept. 30, 2020, lenders must resume obtaining Agency approval in accordance with all applicable program regulations, forms and existing authorities. For additional information, see page 19655 of the April 8, 2020, Federal Register.

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 Single Family Housing 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.

 

Lenders may approve the initial 180-day COVID-19 Forbearance no later than October 30, 2020.

For the most current information, visit https://www.rd.usda.gov/sites/default/files/USDA_COVID-19_Fed_Rural_Reso... .

Guaranteed loans

Guaranteed loan borrowers in default, or facing imminent default due to a documented hardship, can have payments reduced or suspended by their lender for no more than 12 months delinquency. Once the hardship is resolved, the lender can modify the loan to cure the delinquency or make up the missed payments based on individual circumstances. For more information on guaranteed loans, email sfhgld.program@usda.gov.

Direct Loans

The USDA waived or relaxed some parts of the application process for single family housing direct loans, and has extended the time period that certificates of eligibility are valid. Direct loan borrowers with a reduction in income by more than 10 percent can request a payment assistance package to see if they are eligible for payment assistance or for more assistance than currently received.

Moratorium assistance is available for direct loan borrowers with medical bill expenses not covered by insurance or job loss from COVID-19. Qualifying borrowers can receive a moratorium on house payments for a period of time to repay at a later date.

For more information on direct loans, call USDA Customer Service at 800-414-1226 (7 a.m. to 5 p.m. EST Monday to Friday, or visit https://www.rd.usda.gov/contact-us/loan-servicing. Call volume and wait times are high at this time.

Multi-Family Housing

Owners, management agents and tenants all have relief options at this time. Tenant certifications due March 31, April 30 and May 31 for multi-family properties are extended to June 30, with no late fees or overage charges. The extension allows additional time to complete the certifications while avoiding face-to-face meetings as recommended by the U.S. Centers for Disease Control and Prevention (CDC). Late fees on Section 515 mortgages will be waived, subject to waiver authority.

Section 515 annual financial statements originally due March 31 are extended 30 days. USDA is considering if a longer extension is appropriate at this time.

Current policy requires owners process an interim recertification at the tenant's request if there is a $50 income change or more per month; the policy should continue to be applied. USDA encourages all owners to work with all tenants with impacted income to adjust rent payments.

USDA encourages all owners to work with impacted residents to adjust rent payments, enter into forbearance agreements, and lessen the impact on affected residents. No additional subsidy funding has been made available as of March 25. If borrowers are temporarily unable to make loan payments, the agency may waive late fees and enter into an official "workout plan."

Rural Utilities Service

USDA extended the March 20 deadline for Telecommunications and Electric Program borrowers and grantees for 60 days to submit their annual CPA audit. The audits are usually due by April 30.

USDA is waiving borrower covenant requirements for loan agreement financial ratios for the period from Jan. 1 to Dec. 31, 2020. USDA is also waiving all financial reporting requirements associated with existing Rural Utilities Service (RUS) loan and grant covenants from Jan. 1 to June 30, 2020.

The RUS Administrator has delegated authority to the RUS Telecommunications, Electric, and Water and Environmental Programs to consider waiver requests for 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 video conferences, tele conferences and public notices on websites and in local newspapers, as a substitute for the public meeting notification requirement for water and waste projects.

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; all on a case-by-case basis. For more information, contact: Electric Program: Christopher McLean, Christopher.mclean@usda.gov, 202-407-2986; Telecommunications Program: Laurel Leverrier, laurel.leverrier@usda.gov, 202-495-9142; Water and Environmental Programs: Edna Primrose, edna.primrose@usda.gov, 202-494-5610.

Rural Business-Cooperative Service

Through July 31, 2020, USDA Business and Industry Loan Guarantees (B&I) and Rural Energy for America Program (REAP) guaranteed lenders may assist borrowers experiencing temporary cash flow issues by deferring payments for no longer than 120 days. The lender must notify the agency in writing of any payment deferments. Written notification will meet the standard for concurrence until July 31, 2020. A response from the agency is not required. This applies to all borrowers with a current repayment status as of March 1, 2020.

If the guaranteed loan has been sold on the secondary market, the secondary market holder and lender must agree to the deferment actions being taken. The agency will expect a written agreement from both parties in these instances.

RBCS intermediary borrowers still have authority to service loan portfolios independent of USDA. Intermediary borrowers participating in these programs may approve loan payment deferrals to 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 you on loan servicing requests on a case-by-case basis to make sure you remain a pillar in our rural business communities.

Application deadline extensions

USDA is extending the application window for the following programs:

• Rural Business-Cooperative Service: Rural Business Development Grant (RBDG) program deadline extended to no later than April 15, 2020. Contact the Rural Development office for the deadline in your state

• Rural Energy for America Program (REAP): extended to April 15, 2020. For more information, see page 16925 of the March 25, 2020 Federal Register.

For USDA Rural Development information related to COVID-19, visit www.rd.usda.gov/coronavirus .