source:
  type: guide
  id: usda-hb-3555-14.2
  authority: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶14.2 —
    Program Funding Process
  description: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶14.2
    — Program Funding Process.
  coverage_tier: operative
obligations:
- id: usda-hb-3555-14.2-full
  canonical_id: usda-hb-3555-14.2-full
  section: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶14.2 — Program
    Funding Process
  type: do
  tags:
  - regulator-direct
  - usda
  - usda-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶14.2
      — Program Funding Process
    source_class: usda-handbook
    source_url: https://www.rd.usda.gov/sites/default/files/hb-1-3555_consolidated.pdf
    snapshot_id: 0466acd1ea2d17a4
    fetched_at: '2026-05-25T14:10:13Z'
    content_hash: sha256:22ac6f998ff72578e318fca138ebe80fb18ae2fc701eb5936172f1842679a13a
    paragraph_quote: '14.2 PROGRAM FUNDING PROCESS Funds are allocated and distributed
      to the Agency by the budget staff at the beginning of each fiscal year through
      the Single Family Housing Guaranteed Loan Program (SFHGLP). The State accounts
      will receive funds proportionate to the percentage of prior year’s actual obligations.
      Additionally, a portion of the funds will be held in the National Office reserve
      to support State accounts that may require a higher allocation compared to the
      previous year. This measure aims to guarantee adequate funding for the SFHGLP
      across all State accounts, based on the allocated funds approved by the Budget
      Office. The National Office will keep lenders and Agency staff apprised of the
      potential for a shortage of available funds with an advance notice. 14.3 PRIORITIZATION
      OF FUNDING [7 CFR 3555.107] When funding is not sufficient to fund all applications,
      a priority system is used to ensure that applicants who meet the priorities
      established for the program are selected for processing first. The priority
      system is used to determine the order in which applications HB-1-3555 (03-09-16)
      SPECIAL PN 14-2 Revised (10-12-23) PN 594 Guidance documents lack the force
      and effect of law, unless expressly authorized by statute or incorporated into
      a contract. USDA may not cite, use, or rely on any guidance that is not available
      through their guidance portal, except to establish historical facts. will be
      processed. If funds are limited, the Agency will prioritize requests to first-time
      homebuyers or veterans. In the case of applications with equivalent priority
      status that are received on the same day, preference in funding will be given
      to those qualifying for veteran’s preference. The following outlines the criteria
      to meet the prioritization: 1. Households that Qualify for First-Time Homebuyers
      Preferences [7 CFR 3555.10] A household qualifies for a first-time homebuyer
      preference if any applicant meets any one of the following criteria: x An individual
      who has had no ownership interest in a principal residence during the three-year
      period ending on the date of loan closing. x An individual who is a displaced
      homemaker and who, except for owning a home with a spouse, has had no ownership
      interest in a principal residence during the three-year period ending on the
      date of loan closing. A displaced homemaker who is unemployed or underemployed,
      and having trouble obtaining or upgrading employment. Or an individual who in
      recent years has worked primarily without earnings to care for the home and
      family and has not worked full-time, full-year in the labor force. x An individual
      who is a single parent and who, except for owning a home with a spouse, has
      had no ownership interest in a principal residence during the three- year period
      ending on the date of loan closing. Single parents include any individual who
      is unmarried or legally separated from a spouse and has custody or joint custody
      of one or more minor children, or is pregnant. 2. Households that Qualify for
      Veterans Preferences [7 CFR 3555.10] A household qualifies for a veteran''s
      preference if any applicant has served on active duty and has been discharged
      or released from the active forces on conditions other than dishonorable from
      the United States Army, Navy, Air Force, Marine Corps, or Coast Guard. The preference
      applies to the serviceperson, or the family of a deceased serviceperson who
      died in service before termination of such war or such period or era. The applicable
      time frames are: During the period of April 6, 1917 through March 31, 1921;
      x During the period of December 7, 1941 through December 31, 1946; x During
      the period of June 27, 1950 through January 31, 1955; HB-1-3555 (03-09-16) SPECIAL
      PN 14-3 Revised (10-12-23) PN 594 Guidance documents lack the force and effect
      of law, unless expressly authorized by statute or incorporated into a contract.
      USDA may not cite, use, or rely on any guidance that is not available through
      their guidance portal, except to establish historical facts. x For a period
      of more than 180 days, any part of which occurred after January 31, 1955, but
      on or before May 7, 1975; x During the period beginning August 2, 1990 through
      January 2, 1992; or x Any other prescribed by Presidential Proclamation or law.
      14.4 AGENCY ACTIONS – SHORTAGE OF FUNDS The following actions will be taken
      by the Agency when program funding is limited: A. Agency Actions When Funds
      Are Not Available The National Office will keep lenders and Agency staff apprised
      of the potential for a shortage of available funds. If funds become limited,
      the Agency will allocate funds in accordance with the percentage obligated in
      the prior year under a Continuing Resolution or based on the basic allocation
      formula in RD Instruction 1940-L for the current fiscal year. Agency staff will
      place the request on a waiting list and notify the lender that a delay is expected.
      Applicants who qualify for a preference as a first-time homebuyer or as a veteran
      will be placed on the waiting list above those without such a preference, in
      the order received. All other applicants will be placed on the waiting list
      in date-order below those who qualify for preferences. Loan guarantee requests
      will remain on the waiting list until funds become available or the lender withdraws
      the request, whichever is first. If the request is received after funds are
      exhausted, the Agency will notify the lender that the loan guarantee request
      may be deferred until the following fiscal year. Approval officials will keep
      lenders aware of actions to be taken. If there is a possibility that funds will
      soon be available, the request for guarantee may be reviewed. The lender should
      be notified if the Agency cannot honor normal turn-around times. Complete applications
      will be reviewed and funded (as appropriate) on a “first-come first-served”
      basis. Incomplete applications will be returned and may be resubmitted. Lenders
      should be advised of the reason the application is being returned, and what
      is required to complete the application. The approving office is responsible
      for keeping the lender abreast of the status of the applications submitted and
      any availability of funds. HB-1-3555 (03-09-16) SPECIAL PN 14-4 Revised (10-12-23)
      PN 594 Guidance documents lack the force and effect of law, unless expressly
      authorized by statute or incorporated into a contract. USDA may not cite, use,
      or rely on any guidance that is not available through their guidance portal,
      except to establish historical facts. B. Agency Actions When Funds Are Not Available
      – Conditional Commitments Subject to Availability of Funds When funds are not
      available, the National Office may authorize issuing Conditional Commitments
      “subject to receipt of congressionally appropriated funds.” In such cases, when
      in the best interest of the Government, the Agency will continue to issue Conditional
      Commitments. When issuing Conditional Commitments that are contingent upon the
      availability of congressionally appropriated funds, Agency personnel will include
      a specific condition stating that the funds are currently unavailable and outlining
      the expected actions from lenders during the interim period. The National Office
      will provide the authorized statement for commitments subject to funding, which
      will be included in the Conditional Commitment generated by the system. Subsequently,
      once a Conditional Commitment is initially issued with the “subject to availability
      of funds” language, it will be reissued to the lender after funds have been
      obtained and obligated, with the “subject to availability of funds” language
      removed from the Conditional Commitment. Lenders may close these loans provided
      they fulfill all the conditions stated on the Conditional Commitment. The Agency
      will not be able to issue a Loan Note Guarantee until funding becomes available.
      When funding becomes available, the lender must make a certification there has
      been no adverse change in the borrower’s financial condition since issuance
      of the Conditional Commitment. A lender must certify to the Agency, using the
      process provided on Form RD 3555-18, Conditional Commitment for Single Family
      Housing Loan Guarantee, that there have been no adverse changes in the borrower’s
      financial condition since the Conditional Commitment was issued by the Agency.
      The lender will assume all risk of loss until funds become available and the
      Agency issues the Loan Note Guarantee.'
  judgment: false
