source:
  type: regulation
  id: usda-7cfr-3555.303
  authority: 7 CFR Part 3555 — USDA Single Family Housing Guaranteed Loan Program § 3555.303 — Traditional servicing
    options
  description: '7 CFR Part 3555 — USDA Single Family Housing Guaranteed Loan Program, §3555.303 Traditional servicing
    options. Captured section-complete (all subsections verbatim).

    '
obligations:
- id: usda-7cfr-3555.303-a
  canonical_id: usda-7cfr-3555.303-a
  section: 7 CFR §3555.303(a)
  description: 'Traditional servicing options — (a): (a) Eligibility. To be eligible for traditional servicing,
    all the following conditions must be met: (1) The borrower presently occupies the property; (2) The borrower
    is in default or facing imminent default for an involuntary reason. A borrower is &#x201C;facing imminent default&#x201D;
    if that bo…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  primary_source:
    tier: 1
    authority: 7 CFR Part 3555 — USDA Single Family Housing Guaranteed Loan Program § 3555.303
    source_class: ecfr-xml
    source_url: https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XXXV/part-3555
    snapshot_id: 60bd6fb03befa14c
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:f1f884c828bb807baf369d30e1a9479648dfa62165e28511a0730ed785181a8b
    paragraph_quote: '(a) Eligibility. To be eligible for traditional servicing, all the following conditions must
      be met: (1) The borrower presently occupies the property; (2) The borrower is in default or facing imminent
      default for an involuntary reason. A borrower is &#x201C;facing imminent default&#x201D; if that borrower
      is current or less than 30 days past due on the mortgage obligation and is experiencing a significant reduction
      in income or some other hardship that will prevent him or her from making the next required payment on the
      mortgage during the month in which it is due. The borrower must be able to document the cause of the imminent
      default, which may include, but is not limited to, one or more of the following types of hardship:'
    drafter_attestation: Verbatim (whitespace-normalized) slice of §3555.303 subsection (a) from snapshot 60bd6fb03befa14c;
      substring-verified.
  judgment: false
- id: usda-7cfr-3555.303-i
  canonical_id: usda-7cfr-3555.303-i
  section: 7 CFR §3555.303(i)
  description: 'Traditional servicing options — (i): (i) A reduction in or loss of income that was supporting the
    mortgage loan; (ii) A change in household financial circumstances; (3) The borrower demonstrates a reasonable
    ability to support repayment of the debt in the future; (4) There are no adverse property conditions that inhibit
    the inhabitabil…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  primary_source:
    tier: 1
    authority: 7 CFR Part 3555 — USDA Single Family Housing Guaranteed Loan Program § 3555.303
    source_class: ecfr-xml
    source_url: https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XXXV/part-3555
    snapshot_id: 60bd6fb03befa14c
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:f1f884c828bb807baf369d30e1a9479648dfa62165e28511a0730ed785181a8b
    paragraph_quote: (i) A reduction in or loss of income that was supporting the mortgage loan; (ii) A change in
      household financial circumstances; (3) The borrower demonstrates a reasonable ability to support repayment
      of the debt in the future; (4) There are no adverse property conditions that inhibit the inhabitability or
      use of the property; and (5) The borrower has not received assistance due to the submission of false information
      by the borrower.
    drafter_attestation: Verbatim (whitespace-normalized) slice of §3555.303 subsection (i) from snapshot 60bd6fb03befa14c;
      substring-verified.
  judgment: false
- id: usda-7cfr-3555.303-b
  canonical_id: usda-7cfr-3555.303-b
  section: 7 CFR §3555.303(b)
  description: 'Traditional servicing options — (b): (b) Servicing options. The lender must consider traditional
    servicing options in the following order to resolve the borrower''s default or imminent default: (1) Repayment
    agreement. A repayment agreement is an informal plan lasting 3 months or less to cure short-term delinquencies.
    (2) Special forbea…'
  type: dont
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  primary_source:
    tier: 1
    authority: 7 CFR Part 3555 — USDA Single Family Housing Guaranteed Loan Program § 3555.303
    source_class: ecfr-xml
    source_url: https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XXXV/part-3555
    snapshot_id: 60bd6fb03befa14c
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:f1f884c828bb807baf369d30e1a9479648dfa62165e28511a0730ed785181a8b
    paragraph_quote: '(b) Servicing options. The lender must consider traditional servicing options in the following
      order to resolve the borrower''s default or imminent default: (1) Repayment agreement. A repayment agreement
      is an informal plan lasting 3 months or less to cure short-term delinquencies. (2) Special forbearance agreement.
      A special forbearance agreement is a longer-term formal plan to cure a delinquency not to exceed the equivalent
      of 12 months of PITI. The agreement may gradually increase monthly payments in an amount sufficient to repay
      the arrearage over a reasonable amount of time and/or temporarily reduce or suspend payments for a short period.
      If the borrower is at least 3 months delinquent, the special forbearance agreement may resume normal payments
      for several months followed by a loan modification. (3) Loan modification plan. A loan modification is a permanent
      change in one or more of the terms of a loan that results in a payment the borrower can afford and allows
      the loan to be brought current. A loan modification must be a written agreement. (i) The lender''s lien priority
      cannot be adversely affected by providing a loan modification. (ii) Loan modifications must be a fixed interest
      rate and cannot exceed the market interest rate at the time of modification. (iii) Loan modifications may
      capitalize all or a portion of the arrearage and/or reamortization of the balance due including foreclosure
      fees and costs associated with the delinquency, tax and insurance advances, and past due Agency annual fees
      imposed by the lender. Late charges and lender fees may not be capitalized. (iv) If necessary to demonstrate
      repayment ability, the loan term after reamortization may be extended for up to 40 years from the date of
      the loan modification.'
    drafter_attestation: Verbatim (whitespace-normalized) slice of §3555.303 subsection (b) from snapshot 60bd6fb03befa14c;
      substring-verified.
  judgment: false
- id: usda-7cfr-3555.303-v
  canonical_id: usda-7cfr-3555.303-v
  section: 7 CFR §3555.303(v)
  description: 'Traditional servicing options — (v): (v) Lenders may require that borrowers complete a trial payment
    plan prior to making scheduled payments amended by the traditional loan servicing loan modification. (vi) Traditional
    servicing options shall be used in the order established in this section to reduce the borrower''s mortgage
    payment to …'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  primary_source:
    tier: 1
    authority: 7 CFR Part 3555 — USDA Single Family Housing Guaranteed Loan Program § 3555.303
    source_class: ecfr-xml
    source_url: https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XXXV/part-3555
    snapshot_id: 60bd6fb03befa14c
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:f1f884c828bb807baf369d30e1a9479648dfa62165e28511a0730ed785181a8b
    paragraph_quote: (v) Lenders may require that borrowers complete a trial payment plan prior to making scheduled
      payments amended by the traditional loan servicing loan modification. (vi) Traditional servicing options shall
      be used in the order established in this section to reduce the borrower's mortgage payment to income ratio
      as close as possible to 31 percent of gross monthly income. (vii) If the targeted mortgage payment to income
      cannot be achieved using a loan modification alone, the lender may consider a mortgage recovery advance under
      this section in addition to the loan modification. (4) Mortgage recovery advance. A mortgage recovery advance
      is funds advanced by the lender on behalf of a borrower to satisfy the borrower's arrearage and reduce principal.
    drafter_attestation: Verbatim (whitespace-normalized) slice of §3555.303 subsection (v) from snapshot 60bd6fb03befa14c;
      substring-verified.
  judgment: false
- id: usda-7cfr-3555.303-i
  canonical_id: usda-7cfr-3555.303-i
  section: 7 CFR §3555.303(i)
  description: 'Traditional servicing options — (i): (i) Borrowers may be eligible for multiple Mortgage Recovery
    Advances up to a cumulative amount that is less than or equal to 30 percent of the unpaid principal balance
    as of the date of the initial default. (ii) If the borrower''s total monthly mortgage payment is within a reasonable
    percent of the …'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  primary_source:
    tier: 1
    authority: 7 CFR Part 3555 — USDA Single Family Housing Guaranteed Loan Program § 3555.303
    source_class: ecfr-xml
    source_url: https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XXXV/part-3555
    snapshot_id: 60bd6fb03befa14c
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:f1f884c828bb807baf369d30e1a9479648dfa62165e28511a0730ed785181a8b
    paragraph_quote: (i) Borrowers may be eligible for multiple Mortgage Recovery Advances up to a cumulative amount
      that is less than or equal to 30 percent of the unpaid principal balance as of the date of the initial default.
      (ii) If the borrower's total monthly mortgage payment is within a reasonable percent of the borrower's ability
      to repay prior to an extended term loan modification, the mortgage recovery advance can be used to cure the
      borrower's delinquency without changing the terms of the promissory note. (iii) The principal deferment amount
      for a specific case shall be limited to the amount that will bring the borrower's total monthly mortgage payment
      to 31 percent of gross monthly income. (iv) If the borrower is eligible for a mortgage recovery advance, the
      servicer will advance the funds to the borrower's account and create a non-interest-bearing recoverable servicing
      advance. The balance is to be provided on the mortgage statements along with the principal balance of the
      loan, but no payment arrangement will be required.
    drafter_attestation: Verbatim (whitespace-normalized) slice of §3555.303 subsection (i) from snapshot 60bd6fb03befa14c;
      substring-verified.
  judgment: false
- id: usda-7cfr-3555.303-v
  canonical_id: usda-7cfr-3555.303-v
  section: 7 CFR §3555.303(v)
  description: 'Traditional servicing options — (v): (v) Prior to making a mortgage recovery advance, the lender
    must perform an escrow analysis to ensure that the payment made on behalf of the borrower accurately reflects
    the escrow amount required for taxes and insurance. (vi) The lender may request reimbursement from the Agency
    for a mortgage recov…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  primary_source:
    tier: 1
    authority: 7 CFR Part 3555 — USDA Single Family Housing Guaranteed Loan Program § 3555.303
    source_class: ecfr-xml
    source_url: https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XXXV/part-3555
    snapshot_id: 60bd6fb03befa14c
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:f1f884c828bb807baf369d30e1a9479648dfa62165e28511a0730ed785181a8b
    paragraph_quote: '(v) Prior to making a mortgage recovery advance, the lender must perform an escrow analysis
      to ensure that the payment made on behalf of the borrower accurately reflects the escrow amount required for
      taxes and insurance. (vi) The lender may request reimbursement from the Agency for a mortgage recovery advance.
      The lender shall repay any such reimbursement as provided in this section. (vii) The following terms apply
      to the repayment of a mortgage recovery advance: (A) Borrowers are not required to make any monthly or periodic
      payments on the mortgage recovery advance; however, borrowers may voluntarily submit partial payments without
      incurring any prepayment penalty. (B) The borrower is responsible for payment of the mortgage recovery advance
      to the lender in full at the earlier of the following: ( 1 ) When the first lien mortgage and guaranteed note
      are paid off; or ( 2 ) When the borrower transfers title to the property by voluntary or involuntary means.
      (C) The lender shall remit to the agency the amount mortgage recovery advance reimbursed by the Agency for
      a mortgage recovery advance, as described in this part, at the earliest of the following: ( 1 ) When the lender
      receives payment is received from the borrower; or ( 2 ) When the mortgage lien is released; or ( 3 ) When
      the borrower transfers title to the property by voluntary or involuntary means. ( i ) The Agency will collect
      this Federal Debt from the lender. The Agency may use the debt collection and administrative offset process
      to collect money owed. ( ii ) In the event of a loss claim, the mortgage recovery advance will be considered
      in calculating the claim paid by the Agency. The total amount paid cannot exceed the maximum loss payment
      described in &#xA7; 3555.351(b). ( iii ) Borrowers are not required to make any monthly or periodic payments
      on the mortgage recovery advance note; however, borrowers may voluntarily submit partial payments without
      incurring any prepayment penalty.'
    drafter_attestation: Verbatim (whitespace-normalized) slice of §3555.303 subsection (v) from snapshot 60bd6fb03befa14c;
      substring-verified.
  judgment: false
- id: usda-7cfr-3555.303-c
  canonical_id: usda-7cfr-3555.303-c
  section: 7 CFR §3555.303(c)
  description: 'Traditional servicing options — (c): (c) Terms of loan note guarantee. Use of traditional servicing
    options does not change the terms of the loan note guarantee except when the traditional servicing option meets
    the requirements of paragraph (b)(3)(iv) of this section. The loan guarantee will apply to loan terms extending
    beyond the 30…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  primary_source:
    tier: 1
    authority: 7 CFR Part 3555 — USDA Single Family Housing Guaranteed Loan Program § 3555.303
    source_class: ecfr-xml
    source_url: https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XXXV/part-3555
    snapshot_id: 60bd6fb03befa14c
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:f1f884c828bb807baf369d30e1a9479648dfa62165e28511a0730ed785181a8b
    paragraph_quote: (c) Terms of loan note guarantee. Use of traditional servicing options does not change the
      terms of the loan note guarantee except when the traditional servicing option meets the requirements of paragraph
      (b)(3)(iv) of this section. The loan guarantee will apply to loan terms extending beyond the 30-year loan
      term from the date of origination when a loan modification meets the criteria set forth in paragraph (b)(3)(iv).
      [78 FR 73941, Dec. 9, 2013, as amended at 81 FR 6430, Feb. 8, 2016; 84 FR 70886, Dec. 26, 2019; 89 FR 66193,
      Aug. 15, 2024; 90 FR 9375, Feb. 12, 2025]
    drafter_attestation: Verbatim (whitespace-normalized) slice of §3555.303 subsection (c) from snapshot 60bd6fb03befa14c;
      substring-verified.
  judgment: false
