WASHINGTON — The lending arm of U.S. Department of Agriculture guaranteed 3,439 single-family construction loans in the first quarter of fiscal year 2017, which ended Dec. 31, but just nine of those loans involved its new single-close construction to permanent financing option.

"We expect to see the numbers increase with the temperature this spring," said Rural Housing Service spokeswoman Jacqueline Susmann in an email.

So far, 25 lenders have signed up to offer the RHS single-close construction loan program and agency officials are encouraging more participants.

"We are working with lenders, builders, builder's associations, and reporters to get the word out about the flexibility of the single-close construction to permanent financing option," said RHS Administrator Tony Hernandez in a statement.

Under the traditional RHS construction loan program, the builder must secure funding for the construction phase. Once construction is completed and the house is ready for occupancy, RHS will guarantee the final loan.

RHS designed the single-close program to be more attractive to lenders and builders with the loan made to the homebuyer, not the builder. As a result, the builder doesn't have to secure financing or a line of credit for the construction phase.

The Rural Housing Service guaranteed 9,687 single-family construction loans in fiscal year 2016, which ended Sept. 30. Just 39 loans were the single-close loans totaling nearly $7,492,000.

RHS finalized the construction loan program in March 2016 to address the lack of new and affordable housing stock in rural areas and to promote economic development.

Single-close construction to permanent loans can be securitized and sold into the secondary market via Ginnie Mae.

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