source:
  type: regulation
  id: usda-7cfr-3555.101
  authority: 7 CFR §3555.101 — Loan purposes (USDA Guaranteed Rural Housing)
  description: '7 CFR §3555.101 sets the closed list of eligible loan purposes and

    eligible costs for the USDA Section 502 Guaranteed Rural Housing

    Program: principal-residence use requirement, eligible-purposes

    list, eligible-costs list (including allowable closing costs with

    finder''s-fee prohibition), combination construction-and-permanent

    loans, and the three refinance options (streamlined, non-

    streamlined, streamlined-assist) with their respective rate-

    reduction, appraisal, current-payment-history, and same-property

    requirements.

    '
obligations:
- id: usda-7cfr-3555.101-full
  canonical_id: usda-7cfr-3555.101-full
  section: 7 CFR §3555.101
  description: Loan funds must be used to acquire a new or existing dwelling to be used by the applicant
    as a principal residence .
  type: do
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 7 CFR §3555.101
    source_class: usda-regulation
    source_url: https://www.law.cornell.edu/cfr/text/7/3555.101
    snapshot_id: 26c27fd6e5118ed7
    fetched_at: '2026-05-24T19:34:38Z'
    content_hash: sha256:1f9e807ef8e9a4354b5a7631729e0d4002fcba07953bcf63ec4029391748b3ba
    paragraph_quote: Loan funds must be used to acquire a new or existing dwelling to be used by the applicant
      as a principal residence .
    drafter_attestation: Verbatim subsection of 7 CFR §3555.101 from Cornell LII snapshot 26c27fd6e5118ed7;
      body isolated between nav and notes; substring-verified.
  judgment: false
- id: usda-7cfr-3555.101-a
  canonical_id: usda-7cfr-3555.101-a
  section: 7 CFR §3555.101(a)
  description: '(a): (a) Eligible purposes. Loan funds may be used for: (1) The construction or purchase
    of a new dwelling ; (2) The cost of acquisition of an existing dwelling ; (3) The cost of repairs
    associated with the acquisition of an existing dwelling ; or (4) Acquisition and relocation of an
    existing dwelling .'
  type: do
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 7 CFR §3555.101
    source_class: usda-regulation
    source_url: https://www.law.cornell.edu/cfr/text/7/3555.101
    snapshot_id: 26c27fd6e5118ed7
    fetched_at: '2026-05-24T19:34:38Z'
    content_hash: sha256:1f9e807ef8e9a4354b5a7631729e0d4002fcba07953bcf63ec4029391748b3ba
    paragraph_quote: '(a) Eligible purposes. Loan funds may be used for: (1) The construction or purchase
      of a new dwelling ; (2) The cost of acquisition of an existing dwelling ; (3) The cost of repairs
      associated with the acquisition of an existing dwelling ; or (4) Acquisition and relocation of an
      existing dwelling .'
    drafter_attestation: Verbatim subsection of 7 CFR §3555.101 from Cornell LII snapshot 26c27fd6e5118ed7;
      body isolated between nav and notes; substring-verified.
  judgment: false
- id: usda-7cfr-3555.101-b
  canonical_id: usda-7cfr-3555.101-b
  section: 7 CFR §3555.101(b)
  description: '(b): (b) Eligible costs. Loan funds also may be used to pay for the following items associated
    with the acquisition of a dwelling: (1) Purchase and installation of essential household equipment
    in the dwelling such as wall-to-wall carpeting, ovens, ranges, refrigerators, washing machines, clothes
    dryers,…'
  type: do
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 7 CFR §3555.101
    source_class: usda-regulation
    source_url: https://www.law.cornell.edu/cfr/text/7/3555.101
    snapshot_id: 26c27fd6e5118ed7
    fetched_at: '2026-05-24T19:34:38Z'
    content_hash: sha256:1f9e807ef8e9a4354b5a7631729e0d4002fcba07953bcf63ec4029391748b3ba
    paragraph_quote: '(b) Eligible costs. Loan funds also may be used to pay for the following items associated
      with the acquisition of a dwelling: (1) Purchase and installation of essential household equipment
      in the dwelling such as wall-to-wall carpeting, ovens, ranges, refrigerators, washing machines,
      clothes dryers, heating and cooling equipment, and other similar items as long as the equipment
      is conveyed with the dwelling and such items are typically included in the purchase of similar dwellings
      in the area. (2) Purchase and installation of energy-saving measures. (3) Site preparation including
      grading, foundation, plantings, seeding or sodding, trees, walks, fences, and driveways to the home.
      (4) A supplemental loan to provide funds for seller equity or essential repairs when an existing
      guaranteed loan is assumed simultaneously. (5) Special design features or equipment when necessary
      because of a physical disability of the applicant or a member of the household . (6) Loan funds
      may be used to pay for reasonable and customary expenses related to obtaining the loan. Allowable
      loan expenses include:'
    drafter_attestation: Verbatim subsection of 7 CFR §3555.101 from Cornell LII snapshot 26c27fd6e5118ed7;
      body isolated between nav and notes; substring-verified.
  judgment: false
- id: usda-7cfr-3555.101-i
  canonical_id: usda-7cfr-3555.101-i
  section: 7 CFR §3555.101(i)
  description: '(i): (i) Legal, architectural, and engineering fees; (ii) Title exam, title clearance
    and title insurance; (iii) Transfer taxes and recordation fees; (iv) Appraisal, property inspection,
    surveying, environmental, tax monitoring, and technical services;'
  type: do
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 7 CFR §3555.101
    source_class: usda-regulation
    source_url: https://www.law.cornell.edu/cfr/text/7/3555.101
    snapshot_id: 26c27fd6e5118ed7
    fetched_at: '2026-05-24T19:34:38Z'
    content_hash: sha256:1f9e807ef8e9a4354b5a7631729e0d4002fcba07953bcf63ec4029391748b3ba
    paragraph_quote: (i) Legal, architectural, and engineering fees; (ii) Title exam, title clearance
      and title insurance; (iii) Transfer taxes and recordation fees; (iv) Appraisal, property inspection,
      surveying, environmental, tax monitoring, and technical services;
    drafter_attestation: Verbatim subsection of 7 CFR §3555.101 from Cornell LII snapshot 26c27fd6e5118ed7;
      body isolated between nav and notes; substring-verified.
  judgment: false
- id: usda-7cfr-3555.101-v
  canonical_id: usda-7cfr-3555.101-v
  section: 7 CFR §3555.101(v)
  description: '(v): (v) Homeownership education. (vi) Reasonable and customary loan discount points to
    reduce the note interest rate from the rate authorized in § 3555.104(a) . (vii) Reasonable and customary
    non-recurring closing costs associated with the mortgage transaction that do not exceed those charged
    other appl…'
  type: dont
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 7 CFR §3555.101
    source_class: usda-regulation
    source_url: https://www.law.cornell.edu/cfr/text/7/3555.101
    snapshot_id: 26c27fd6e5118ed7
    fetched_at: '2026-05-24T19:34:38Z'
    content_hash: sha256:1f9e807ef8e9a4354b5a7631729e0d4002fcba07953bcf63ec4029391748b3ba
    paragraph_quote: (v) Homeownership education. (vi) Reasonable and customary loan discount points to
      reduce the note interest rate from the rate authorized in § 3555.104(a) . (vii) Reasonable and customary
      non-recurring closing costs associated with the mortgage transaction that do not exceed those charged
      other applicants by the lender for similar transactions such as FHA -insured or VA -guaranteed first
      mortgage loans. If the lender does not participate in such programs, the loan closing costs may
      not exceed those charged other applicants by the lender for a similar loan program that requires
      conventional mortgage insurance or guarantee. Allowable closing costs include the actual cost of
      credit reports, the loan origination fee, settlement fee, deposit verification fees, document preparation
      fees (if performed by a third party not controlled by the lender), and other reasonable and customary
      costs as determined by Rural Development . Payment of finder's fees or placement fees for the referral
      of an applicant to the lender is prohibited. (viii) Reasonable connection fees, assessments, or
      the pro rata installment costs for utilities such as water, sewer, electricity and gas for which
      the borrower is responsible. (ix) The prorated portion of real estate taxes that is due and payable
      on the property at the time of closing and to establish escrow accounts for real estate taxes ,
      hazard and flood insurance premiums, and related costs.
    drafter_attestation: Verbatim subsection of 7 CFR §3555.101 from Cornell LII snapshot 26c27fd6e5118ed7;
      body isolated between nav and notes; substring-verified.
  judgment: false
- id: usda-7cfr-3555.101-x
  canonical_id: usda-7cfr-3555.101-x
  section: 7 CFR §3555.101(x)
  description: '(x): (x) The amount of the loan up-front guarantee fee required by § 3555.107(g) . (xi)
    The cost of establishing a cushion in the mortgage escrow account for payment of the annual fee required
    by § 3555.107(h) , not to exceed 2 months. (xii) If the seller or other third party pays any of the
    costs descri…'
  type: dont
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 7 CFR §3555.101
    source_class: usda-regulation
    source_url: https://www.law.cornell.edu/cfr/text/7/3555.101
    snapshot_id: 26c27fd6e5118ed7
    fetched_at: '2026-05-24T19:34:38Z'
    content_hash: sha256:1f9e807ef8e9a4354b5a7631729e0d4002fcba07953bcf63ec4029391748b3ba
    paragraph_quote: (x) The amount of the loan up-front guarantee fee required by § 3555.107(g) . (xi)
      The cost of establishing a cushion in the mortgage escrow account for payment of the annual fee
      required by § 3555.107(h) , not to exceed 2 months. (xii) If the seller or other third party pays
      any of the costs described in this section, the amount of the costs paid by the seller or other
      third party may not be included in the loan amount to be guaranteed.
    drafter_attestation: Verbatim subsection of 7 CFR §3555.101 from Cornell LII snapshot 26c27fd6e5118ed7;
      body isolated between nav and notes; substring-verified.
  judgment: false
- id: usda-7cfr-3555.101-c
  canonical_id: usda-7cfr-3555.101-c
  section: 7 CFR §3555.101(c)
  description: '(c): (c) Combination construction and permanent loan. Loan funds may be used and Rural
    Development will guarantee a “combination construction and permanent loan” as defined at § 3555.10
    , during the term of construction and prior to the borrower occupying the property, subject to the
    conditions in § 3555…'
  type: do
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 7 CFR §3555.101
    source_class: usda-regulation
    source_url: https://www.law.cornell.edu/cfr/text/7/3555.101
    snapshot_id: 26c27fd6e5118ed7
    fetched_at: '2026-05-24T19:34:38Z'
    content_hash: sha256:1f9e807ef8e9a4354b5a7631729e0d4002fcba07953bcf63ec4029391748b3ba
    paragraph_quote: (c) Combination construction and permanent loan. Loan funds may be used and Rural
      Development will guarantee a “combination construction and permanent loan” as defined at § 3555.10
      , during the term of construction and prior to the borrower occupying the property, subject to the
      conditions in § 3555.105 .
    drafter_attestation: Verbatim subsection of 7 CFR §3555.101 from Cornell LII snapshot 26c27fd6e5118ed7;
      body isolated between nav and notes; substring-verified.
  judgment: false
- id: usda-7cfr-3555.101-d
  canonical_id: usda-7cfr-3555.101-d
  section: 7 CFR §3555.101(d)
  description: '(d): (d) Refinancing. Refinancing is permitted only in the following situations: (1) The
    loan may be used for permanent financing when temporary financing to construct a new dwelling , or
    to purchase and improve an existing dwelling , is arranged as a part of the loan package. (2) In the
    case of loans fo…'
  type: do
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 7 CFR §3555.101
    source_class: usda-regulation
    source_url: https://www.law.cornell.edu/cfr/text/7/3555.101
    snapshot_id: 26c27fd6e5118ed7
    fetched_at: '2026-05-24T19:34:38Z'
    content_hash: sha256:1f9e807ef8e9a4354b5a7631729e0d4002fcba07953bcf63ec4029391748b3ba
    paragraph_quote: '(d) Refinancing. Refinancing is permitted only in the following situations: (1)
      The loan may be used for permanent financing when temporary financing to construct a new dwelling
      , or to purchase and improve an existing dwelling , is arranged as a part of the loan package. (2)
      In the case of loans for a site on which a dwelling is not constructed prior to issuance of the
      Loan Note Guarantee , refinancing is permitted if:'
    drafter_attestation: Verbatim subsection of 7 CFR §3555.101 from Cornell LII snapshot 26c27fd6e5118ed7;
      body isolated between nav and notes; substring-verified.
  judgment: false
- id: usda-7cfr-3555.101-i
  canonical_id: usda-7cfr-3555.101-i
  section: 7 CFR §3555.101(i)
  description: '(i): (i) The site is free and clear of debt; (ii) The debt to be refinanced was incurred
    for the sole purpose of purchasing the site ; (iii) The applicant is unable to acquire adequate housing
    without refinancing; and (iv) An appropriate dwelling will be constructed on the site . (3) The loan
    is a presen…'
  type: do
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 7 CFR §3555.101
    source_class: usda-regulation
    source_url: https://www.law.cornell.edu/cfr/text/7/3555.101
    snapshot_id: 26c27fd6e5118ed7
    fetched_at: '2026-05-24T19:34:38Z'
    content_hash: sha256:1f9e807ef8e9a4354b5a7631729e0d4002fcba07953bcf63ec4029391748b3ba
    paragraph_quote: '(i) The site is free and clear of debt; (ii) The debt to be refinanced was incurred
      for the sole purpose of purchasing the site ; (iii) The applicant is unable to acquire adequate
      housing without refinancing; and (iv) An appropriate dwelling will be constructed on the site .
      (3) The loan is a present Section 502 Direct or guaranteed loan, authorized under the Housing Act
      of 1949 subject to the following additional requirements:'
    drafter_attestation: Verbatim subsection of 7 CFR §3555.101 from Cornell LII snapshot 26c27fd6e5118ed7;
      body isolated between nav and notes; substring-verified.
  judgment: false
- id: usda-7cfr-3555.101-i
  canonical_id: usda-7cfr-3555.101-i
  section: 7 CFR §3555.101(i)
  description: '(i): (i) Three options for refinancing may be offered: Streamlined, non-streamlined, and
    streamlined-assist. Other than provided in this paragraph, no cash out is permitted for any refinance.
    Documentation costs and underwriting requirements of subparts D, E, and F of this part apply to streamlined
    and n…'
  type: dont
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 7 CFR §3555.101
    source_class: usda-regulation
    source_url: https://www.law.cornell.edu/cfr/text/7/3555.101
    snapshot_id: 26c27fd6e5118ed7
    fetched_at: '2026-05-24T19:34:38Z'
    content_hash: sha256:1f9e807ef8e9a4354b5a7631729e0d4002fcba07953bcf63ec4029391748b3ba
    paragraph_quote: '(i) Three options for refinancing may be offered: Streamlined, non-streamlined,
      and streamlined-assist. Other than provided in this paragraph, no cash out is permitted for any
      refinance. Documentation costs and underwriting requirements of subparts D, E, and F of this part
      apply to streamlined and non-streamlined refinances. (A) Lenders may offer a streamlined refinance
      for existing Section 502 Guaranteed loans, which does not require a new appraisal. The lender will
      pay off the balance of the existing Section 502 Guaranteed loan. (B) Lenders may offer non-streamlined
      refinancing for existing Section 502 Guaranteed or Direct loans, which requires a new and current
      market value appraisal. The amount of the new loan must be supported by sufficient equity in the
      property as determined by an appraisal. The appraised value may be exceeded by the amount of up-front
      guarantee fee financed, if any, when using the non-streamlined option. (C) A streamlined-assist
      refinance loan is a special refinance option available to existing Section 502 direct and guaranteed
      loan borrowers. Applicants must meet the income eligibility requirements of § 3555.151(a) , and
      must not have had any defaults during the 12 month period prior to the refinance loan application
      . There are no debt-to-income calculation requirements, no credit report requirements, no property
      inspection requirements, and no loan-to-value requirements. There is no appraisal requirement except
      for Section 502 direct loan borrowers who have received a subsidy. (ii) The interest rate of the
      new loan must be fixed and must not exceed the interest rate of the original loan being refinanced.
      (iii) Existing borrowers seeking to refinance must have demonstrated their ability to meet payment
      demands by maintaining a current account for the 180 days prior to application . (iv) The loan security
      must include the same property as the original loan and be owned and occupied by the borrowers as
      their principal residence .'
    drafter_attestation: Verbatim subsection of 7 CFR §3555.101 from Cornell LII snapshot 26c27fd6e5118ed7;
      body isolated between nav and notes; substring-verified.
  judgment: false
- id: usda-7cfr-3555.101-v
  canonical_id: usda-7cfr-3555.101-v
  section: 7 CFR §3555.101(v)
  description: '(v): (v) The maximum loan amount cannot exceed the balance of the loan being refinanced
    including accrued interest , the guarantee fee, and reasonable and customary closing costs. When a
    direct loan is refinanced, any recapture amount owed may be included in the loan amount or deferred
    as long as the rec…'
  type: dont
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 7 CFR §3555.101
    source_class: usda-regulation
    source_url: https://www.law.cornell.edu/cfr/text/7/3555.101
    snapshot_id: 26c27fd6e5118ed7
    fetched_at: '2026-05-24T19:34:38Z'
    content_hash: sha256:1f9e807ef8e9a4354b5a7631729e0d4002fcba07953bcf63ec4029391748b3ba
    paragraph_quote: (v) The maximum loan amount cannot exceed the balance of the loan being refinanced
      including accrued interest , the guarantee fee, and reasonable and customary closing costs. When
      a direct loan is refinanced, any recapture amount owed may be included in the loan amount or deferred
      as long as the recapture amount takes a subordinate lien position to the new SFHGLP loan. A discount
      on the recapture amount may be offered if the borrower does not defer recapture or includes the
      recapture amount in the new loan. (vi) Two options for refinancing can be offered. Lenders may offer
      a streamlined refinance for existing Section 502 Guaranteed loans, which does not require a new
      appraisal. Streamlined financing may not be available for existing Section 502 Direct loans. The
      lender will pay off the principal balance of the existing Section 502 Guaranteed loan. The new loan
      amount cannot include any accrued interest , closing costs or lender fees. The refinance up-front
      guarantee fee as established by the Agency can be included in the loan to be refinanced to the extent
      financing does not exceed the original loan amount. Lenders may offer non-streamlined refinancing
      for existing Section 502 Guaranteed or Direct loans, which requires a new and current market value
      appraisal. The new loan may include the principal and interest of the existing Agency loan, reasonable
      closing costs and lenders fees to extent there is sufficient equity in the property as determined
      by an appraisal. The appraised value may be exceeded by the amount of up-front guarantee fee financed,
      if any, when using the non-streamlined option. Documentation, costs, and underwriting requirements
      of subparts D, E, and F of this part apply to refinances, unless otherwise provided by the Agency
      . (vii) Lenders may require property inspections and/or repairs as a condition to loan approval.
      Expenses related to property inspections and repairs required of the lender may not be financed
      into the new loan amount. (viii) The lender pays a guarantee fee as established by the Agency .
      (ix) The refinance loan may be subject to an annual fee as established by the Agency ; and
    drafter_attestation: Verbatim subsection of 7 CFR §3555.101 from Cornell LII snapshot 26c27fd6e5118ed7;
      body isolated between nav and notes; substring-verified.
  judgment: false
- id: usda-7cfr-3555.101-x
  canonical_id: usda-7cfr-3555.101-x
  section: 7 CFR §3555.101(x)
  description: '(x): (x) The Agency may limit the number of guaranteed loans made for refinancing purposes
    based on market conditions and other appropriate factors. [ 78 FR 73941 , Dec. 9, 2013, as amended
    at 81 FR 6428 , Feb. 8, 2016; 81 FR 26464 , May 3, 2016] Housing Act of 1949 CFR Toolbox Law about...
    Articles from…'
  type: do
  tags:
  - regulator-direct
  - section-complete
  - cfpb-regulation
  primary_source:
    tier: 1
    authority: 7 CFR §3555.101
    source_class: usda-regulation
    source_url: https://www.law.cornell.edu/cfr/text/7/3555.101
    snapshot_id: 26c27fd6e5118ed7
    fetched_at: '2026-05-24T19:34:38Z'
    content_hash: sha256:1f9e807ef8e9a4354b5a7631729e0d4002fcba07953bcf63ec4029391748b3ba
    paragraph_quote: (x) The Agency may limit the number of guaranteed loans made for refinancing purposes
      based on market conditions and other appropriate factors. [ 78 FR 73941 , Dec. 9, 2013, as amended
      at 81 FR 6428 , Feb. 8, 2016; 81 FR 26464 , May 3, 2016] Housing Act of 1949 CFR Toolbox Law about...
      Articles from Wex Table of Popular Names Parallel Table of Authorities Accessibility About LII Contact
      us Advertise here Help Terms of use Privacy
    drafter_attestation: Verbatim subsection of 7 CFR §3555.101 from Cornell LII snapshot 26c27fd6e5118ed7;
      body isolated between nav and notes; substring-verified.
  judgment: false
