Rural Housing Service, USDA § 3555.10 result in reassignment with regard to monthly principal and interest pay- the loan guarantee in question so that ments sufficient to fully repay the un- no prohibited relationships or associa- paid principal balance over the mort- tions exist between the Rural Develop- gage term. ment employees responsible for loan Amortized payment. Equal monthly guarantee transactions and lenders, payments under a fully amortized borrowers, or applicants. mortgage loan that provides for the scheduled payment of interest and § 3555.9 Enforcement. principal over the term of the loan. Rural Development will take such ac- Annual fee. A periodic amount that is tions as are appropriate and necessary based on the average annual scheduled to enforce the provisions of these regu- unpaid principal balance of the loan lations. Such actions will include, but and is paid by the servicing lender to not be limited to, reduction of the loss Rural Development on an annual basis claim payment; termination of a lend- for issuance of a Loan Note Guarantee. er’s or servicer’s participation in the The fee may be passed on to the bor- SFHGLP; suspension and debarment of rower and included in the monthly participation in this or other Federal mortgage payment of a borrower and is programs; and, any other appropriate used when calculating payment ratios. administrative, civil, or criminal ac- tions as allowed by law. Rural Develop- Annual income. The income of all ment may assess civil monetary pen- household members calculated accord- alties pursuant to Section 543 of the ing to § 3555.152(b). Annual income is Housing Act of 1949, 42 U.S.C. 1409s(b). used to determine adjusted annual in- come in § 3555.152(c) for program eligi- § 3555.10 Definitions and abbrevia- bility purposes. tions. Applicant. An individual applying to The definitions and abbreviations in a lender for a guaranteed loan. this section apply to this part. Area median income. The median in- Acceleration. Demand for immediate come in a specific locality, typically a repayment of the entire balance of a county or Metropolitan Statistical debt if the covenants in the promissory Area (MSA), as determined by the De- note, assumption agreement, or secu- partment of Housing and Urban Devel- rity instruments are breached. opment. Adjusted annual income. Income from Assumption. A method of selling real all household members who live or pro- estate wherein the property purchaser pose to live in the dwelling as their pri- accepts the liability for payment of an mary residence for all or part of the en- existing mortgage. suing 12 months. Adjusted annual in- Borrower. An individual obligated to come is used to determine whether an repay the loan guaranteed under the applicant is income-eligible for a guar- Guaranteed Rural Housing loan pro- anteed loan, or interest assistance, if gram. applicable. Adjusted annual income Combination construction and perma- provides for deductions to account for nent loan. A guaranteed loan on which varying household circumstances and the Rural Development guarantee be- expenses. See § 3555.152(c) for a com- comes effective at the time construc- plete description of adjusted annual in- come. tion of an eligible single family hous- Agency. The Rural Housing Service of ing project begins. the U.S. Department of Agriculture, Community land trust. A private non- Rural Development. profit community housing development Agency employee. Any employee of the organization that is established to ac- Rural Housing Service, or any em- quire parcels of land, held in per- ployee of the Rural Development mis- petuity, primarily for conveyance sion area who carries out SFHGLP under long-term ground leases. See sec- functions. tion 502(a)(3)(B) of the Housing Act of Alien. See ‘‘Qualified alien.’’ 1949, 42 U.S.C. 1472(a)(3)(B), as amended. Amortization. A gradual reduction of Conditional commitment. Rural Devel- the mortgage debt through equal opment’s agreement that a proposed 423 VerDate Sep<11>2014 09:37 Apr 30, 2015 Jkt 235026 PO 00000 Frm 00433 Fmt 8010 Sfmt 8010 Y:\SGML\235026.XXX 235026 wreier-aviles on DSK5TPTVN1PROD with CFR § 3555.10 7 CFR Ch. XXXV (1–1–15 Edition) loan will be guaranteed if all condi- payment of real estate taxes, special tions and requirements established by assessments, hazard or flood insurance Rural Development are met. premiums, and other similar expenses. Condominium project. A real estate Existing dwelling. A dwelling that project in which each owner has title does not meet the definition of ‘‘new to a unit in a building, an undivided in- dwelling’’. terest in the common areas of the Extended-term loan modification. A project and sometimes the exclusive loan modification authorized under use of certain limited common areas. § 3555.304 of this part, in which the lend- See § 526(d) of the Housing Act of 1949, er reduces the interest rate to a level as amended. at or below the maximum allowable in- Debarment. An action taken under 2 terest rate and then extends the repay- CFR part 180 or 417 to exclude a person ment term up to a maximum of 40 or entity from participating in Federal years from the date of loan modifica- programs. tion, but only as long as is necessary to Disability. See ‘‘Person with a dis- achieve the targeted mortgage pay- ability.’’ ment to income ratio. Dwelling. A house, manufactured Fannie Mae. A private, shareholder- home, or condominium unit, and re- owned company with a charter from lated facilities, such as a garage or Congress to support the housing fi- storage shed, used or to be used as the nance system, formerly officially borrower’s principal residence. known as the Federal National Mort- Elderly family. An elderly family con- gage Association. sists of one of the following: FEMA. The United States Depart- (1) A person who is the head, spouse, ment of Homeland Security, Federal or sole member of a household and who Emergency Management Agency. is 62 years of age or older, or who is FHA. The Federal Housing Adminis- disabled, and is an applicant or bor- tration of the United States Depart- rower; ment of Housing and Urban Develop- (2) Two or more persons who are liv- ment. ing together, at least one of whom is FHLB. Federal Home Loan Bank. age 62 or older, or disabled, and who is First-time homebuyer. Individuals who an applicant or borrower; or meet any one of the following three (3) Where the deceased borrower or criteria are considered first-time spouse in a household was at least 62 homebuyers: years old or disabled, the surviving household member shall continue to be (1) An individual who has had no classified as an elderly household for ownership interest in a principal resi- the purpose of determining adjusted in- dence during the three-year period end- come, even though the surviving mem- ing on the date of loan closing. bers may not meet the definition of an (2) An individual who is a displaced elderly family on their own, provided: homemaker and who, except for owning (i) They occupied the dwelling with a home with a spouse, has had no own- the deceased household member at the ership interest in a principal residence time of the death; during the three-year period ending on (ii) If one of the surviving household the date of loan closing. Displaced members is the spouse of the deceased homemakers include any individual household member, the surviving who is: household shall be classified as an el- (i) An adult; derly family only until the remarriage (ii) Unemployed or underemployed; or death of the surviving spouse; and (iii) Experiencing difficulty in ob- (iii) At the time of the death of the taining or upgrading employment; and deceased household member the dwell- (iv) In recent years has worked pri- ing was financed with a Guaranteed marily without remuneration to care Rural Housing loan. for the home and family, but has not Escrow account. A trust account that worked full-time, full-year in the labor is established by the lender or its serv- force. icing agent to hold funds collected (3) An individual who is a single par- from the borrower and allocated for the ent and who, except for owning a home 424 VerDate Sep<11>2014 09:37 Apr 30, 2015 Jkt 235026 PO 00000 Frm 00434 Fmt 8010 Sfmt 8010 Y:\SGML\235026.XXX 235026 wreier-aviles on DSK5TPTVN1PROD with CFR Rural Housing Service, USDA § 3555.10 with a spouse, has had no ownership in- and under conditions which have been terest in a principal residence during conveyed by a lease. the three-year period ending on the Lender. The entity making, holding, date of loan closing. Single parents in- or servicing a loan that is guaranteed clude any individual who is: under the provisions of this part. (i) Unmarried or legally separated; Live-in aide. A person who: and (1) Lives with an elderly person or a (ii) Has custody or joint custody of person with a disability and one or more children, or is pregnant. (2) Is essential to that person’s care Forbearance agreement. An agreement and well-being, and between the lender and the borrower (3) Is not obligated for the person’s providing for temporary suspension of support, and payments or a repayment plan that (4) Would not be living in the unit ex- calls for periodic payments of less than cept to provide the support services. the normal monthly payment, periodic Loan modification. A written agree- payments at different intervals, etc. to ment that permanently changes an bring the account current.