Selling Guide

Published April 07, 2021

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B6-1-05, Eligible RD-Guaranteed Mortgages (12/15/2015)

Introduction

This topic contains information on eligible RD-guaranteed mortgages, including:


Overview

Fannie Mae will purchase or securitize RD-Guaranteed Section 502 first mortgage loans under the following conditions:

  • The loans must be secured by one-unit residential properties.

  • Fixed-rate RD-Guaranteed Section 502 first mortgage loans that are subject to interest rate buydowns are eligible for delivery to Fannie Mae as long as the borrower is qualified at the note rate.


RD Higher Balance Mortgage Loans

Lenders may deliver higher balance RD-Guaranteed Section 502 first mortgage loans subject to the same Fannie Mae high-cost area loan limits that apply to conventional loans.


Section 502 Leveraged (Blended) Loan Program

Fannie Mae will purchase conventional first mortgage loans that are combined with a direct, low interest rate, subordinate RD Section 502 Leveraged (Blended) Loan Program under the Community Seconds program. Lenders are not required to obtain specific approval from Fannie Mae to originate these RD Section 502 Leveraged (Blended) Loan Program mortgage loans. Any Fannie Mae-approved lender that meets RD’s lender eligibility criteria may deliver mortgages originated under this program.

Fannie Mae will not purchase the RD-subsidized second mortgage. The first mortgage loan must satisfy the eligibility criteria applied to any standard conventional first mortgage in addition to any RD guidelines.

See B5-5.1-02, Community Seconds Loan Eligibility, for additional information.


Delivery Requirements

The following table describes the special feature codes that must be reported for RD Section 502 mortgage loans.

Loan Type Required Special Feature Code(s)
Section 502 Guaranteed first mortgage loan 087
Section 502 Guaranteed first mortgage loan where the subject property is a manufactured home 087 and 235
First mortgage loan originated under RD Section 502 Leveraged (Blended) Loan Program First Mortgage Loan that is combined with RD Section 502 subordinate lien (Community Seconds) 118 and 220

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