The U.S. Department of Agriculture Rural Housing Service has issued updated guidance regarding the use of protective advances and partial releases in the agency’s Single-Family Housing Direct Loan Program. Designed to safeguard the government’s security interest, protective advances are used to finance essential repairs on the property, satisfy prior liens, pay taxes and insurance premiums, or pay local assessments. Protective advances for essential repairs will only be available if the borrower cannot obtain a subsequent loan. They are charged subsequently to the borrower’s account. According to RHS Administrator Tony Hernandez, protective advances are a last-resort measure since they pose a higher risk of loss to the government, compared to other alternatives. In addition to greater risk, advances create tax consequences for the borrower. They can also be more costly to the ...