source:
  type: guide
  id: usda-hb-3555-4.11
  authority: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶4.11 —
    Withdrawal Of Approval
  description: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶4.11
    — Withdrawal Of Approval.
  coverage_tier: operative
obligations:
- id: usda-hb-3555-4.11-full
  canonical_id: usda-hb-3555-4.11-full
  section: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶4.11 — Withdrawal
    Of Approval
  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 ¶4.11
      — Withdrawal Of Approval
    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: '4.11 WITHDRAWAL OF APPROVAL A lender’s approval to participate
      in the SFHGLP does not expire if the lender is an active program participant
      who is complying with Agency guidelines, continues to meet the criteria of Form
      RD 3555-16, Agreement for Participation in Single Family Housing Guaranteed/Insured
      Loan Programs of the United States Government, and remains an eligible lender
      with Fannie Mae, Freddie Mac, HUD, VA, or other lender approval criteria explained
      in Section 3.2 of Chapter 3 of this Handbook. The Agency will perform a review
      on a two year basis to recertify the lender’s on-going eligibility. When the
      Agency withdraws approval, the Agency retains the right to pursue debarment
      and other legal actions, as appropriate. A. Criteria to Withdraw Approval A
      lender’s approval may be withdrawn when the lender is neither servicing loans
      guaranteed under the program, does not hold SFHGLP loans, nor has originated
      a SFHGLP loan in the previous 24 months. Updated training to ensure a lender’s
      continued knowledge of the program may be required when lenders originated a
      small number of loans in the previous 24 months. The Agency will withdraw a
      lender’s approval if the lender experiences uncorrected performance problems.
      The Agency will notify the lender in writing of the reasons for the termination
      and of its appeal rights as described in Appendix 3 of this Handbook. If a lender
      chooses to stop participating in the SFHGLP, the lender should notify the Agency
      in writing. B. Sale of Loans upon Termination Upon the Agency’s termination
      of a lender’s approval, any SFHGLP loans held by the lender must be sold within
      six months to an Agency-approved lender. Failure to sell the loans can result
      in the Agency withdrawing its guarantee from the loans. If poor loan quality
      prevents the sale, the lender may continue to hold the SFHGLP loans in its portfolio;
      however, it must contract with an Agency-approved lender to conduct all HB-1-3555
      (03-09-16) SPECIAL PN 4-9 Revised (08-05-25) PN 649 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
      servicing activities and give proper notifications to the Agency. 4.12 ADDITIONAL
      LENDER RESPONSIBILITIES UPON APPROVAL x Guaranteed Underwriting System (GUS).
      An automated underwriting system is available to approved participating lenders.
      Lenders will utilize GUS and must enter into a User Agreement. Information on
      obtaining access to GUS is provided in Chapter 5 of this Handbook and at http://www.rd.usda.gov/resources/usda-linc-
      training-resource-library/guaranteed-underwriting-system. x Electronic Lender
      Loan Closing System. Lenders must submit closed loans electronically upon execution
      of a User Agreement. Access to the system provides the benefit of paying guarantee
      and technology fees electronically in lieu of paper checks. Additionally, the
      lender will have access to the Loan Note Guarantee electronically. Additional
      information is provided in Chapter 16 of this Handbook. An online user guide
      is available at http://www.rd.usda.gov/resources/usda-linc-training-resource-library/loan-
      closing. x Payment of Annual Fees. Lenders will pay annual fees electronically.
      Lender/servicers will enter into a User Agreement to receive automatic notification
      and electronically pay annual fees due. Additional information is provided Chapter
      16 of this Handbook. x Electronic Status Reporting. Servicers must submit monthly
      default reports and portfolio reports indicating the status of loans they are
      servicing via Electronic Status Reporting (ESR) to the Servicing Office. The
      link https://www.rd.usda.gov/programs-services/lenders/usda-linc-training-resource-
      library provides information on completing a Trading Partner Agreement and utilizing
      the Electronic Status Reporting (ESR) system. Questions or requests for assistance
      may be emailed to RD.SO.HSB@usda.gov. Refer to Chapter 17 and Appendix 8 of
      this Handbook for additional information regarding electronic reporting. x Loss
      Mitigation and Loss Claim Administration. An automated method of processing
      loss mitigation requests pre-liquidation and loss claim administration post-liquidation
      is available to participating lender/servicers. Lenders will enter into a User
      Agreement. Servicers will utilize USDA LINC (Lender Interactive HB-1-3555 (03-09-16)
      SPECIAL PN 4-10 Revised (08-05-25) PN 649 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 Network
      Connection) to submit loss mitigation plans and loss claims, which can be accessed
      at http://usdalinc.sc.egov.usda.gov/RHShome.do. x Post-Closing Lender Self Report.
      Once a loan closes and the Loan Note Guarantee has been issued, the Agency will
      not release the loan in GUS/GLS for corrections. If the lender determines that
      information was not accurately reported during the underwriting process or changes
      occurred between issuance of the Conditional Commitment and the Loan Note Guarantee,
      the lender will submit a self-report to the Agency with a detailed description
      of the issue along with supporting documentation. The Loan Note Guarantee will
      not be revoked. The Agency will review the lender’s documentation and provide
      the lender with a written response. The Agency’s correspondence should be sufficient
      to satisfy most investor’s concerns regarding lender oversights. Additional
      information on submitting a self-report can be found in Attachment 16-B of Chapter
      16 of this Handbook. HB-1-3555 (03-09-16) SPECIAL PN 4-11 Revised (08-05-25)
      PN 649 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 ATTACHMENT 4-A CONDITIONS FOR LENDERS NOT
      HOLDING FUNDS IN ESCROW A lender who does not hold borrower funds in escrow
      for taxes and insurance should consider the following: x The Agency’s loan guarantee
      covers a maximum of twelve months’ past-due real estate taxes and hazard insurance.
      x Loan losses attributable to the borrower’s failure to maintain appropriate
      hazard insurance will not be covered by the Agency’s loan guarantee. x Loan
      losses attributable to the borrower’s failure to pay real estate taxes when
      due will not be covered by the Agency’s loan guarantee. x The lender will report
      annually to the Agency the number of borrowers who failed to pay real estate
      taxes and/or hazard insurance premiums which resulted in the lender advancing
      funds on the borrowers’ behalf. Lenders who do not hold borrower funds in escrow
      should consider doing the following to minimize the risk of taxes and insurance
      not being paid: x Prior to loan closing, the lender must extensively counsel
      applicants about the need for prompt payment of real estate taxes and hazard
      insurance premiums. Applicants must sign a statement indicating that they fully
      understand the significance of these obligations. x The lender must include
      the estimated monthly tax and insurance expenses in the ratio calculations when
      determining the borrower’s loan eligibility. x The lender should encourage applicants
      to set money aside for taxes and insurance through payroll deductions or bank
      accounts with direct deposit. x The lender must ensure that taxes and insurance
      are paid by monitoring insurance policy expiration, contacting the taxing authority
      annually, and reviewing local newspapers for tax delinquencies. HB-1-3555 (03-09-16)
      SPECIAL PN 4-12 Revised (08-05-25) PN 649 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 ATTACHMENT
      4-B SAMPLE FOR ACKNOWLEDGMENT OF REAL ESTATE TAX AND HAZARD INSURANCE REQUIREMENTS
      (Date) I (We), ____________________________________________, hereby acknowledge
      that ________________________________________(lender), has explained the requirements
      for monthly deposits, or set-asides for payment of annual real estate taxes
      and hazard insurance premiums. I (We), the undersigned, do state that I (We)
      understand and agree to set-aside _______ dollars each month ($ monthly amount)
      to pay real estate taxes and hazard insurance premiums when they are due. ____________________________________(Borrower
      Signature) ____________________________________(Borrower Signature) ____________________________________(Lender)
      HB-1-3555 (03-09-16) SPECIAL PN 5-1 Revised (05-05-25) PN 640 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. CHAPTER 5: ORIGINATION AND UNDERWRITING OVERVIEW 5.1 INTRODUCTION [7
      CFR 3555.51(B)] Single Family Housing Guaranteed Loan Program (SFHGLP) loans
      are originated and underwritten by approved lenders. However, the process of
      requesting, issuing, and receiving the loan guarantee is one in which the lender
      and the Agency must cooperate closely. Lenders must provide the Agency with
      clear and accurate information so that Agency staff can promptly determine whether
      the loan qualifies for a guarantee. At the same time, Agency staff must process
      loan applications quickly and accurately to avoid delays that might hamper the
      lender’s efforts to close the loan efficiently. 5.2 REQUESTING A GUARANTEE [7
      CFR 3555.151] Not all loans are appropriate for the SFHGLP. The lender should
      determine whether, based on preliminary information, it appears that the loan
      will meet the program’s criteria. The lender should answer the preliminary eligibility
      questions below to assist in making this determination. The lender should also
      ensure that the applicants are fully informed about the requirements of the
      program. A. Preliminary Determination of Applicant Eligibility In general, the
      program is most appropriately used to offset the risk of making high loan-to-value
      loans in rural areas. It is not intended to offset risks that stem from a poor
      credit history or poor property condition. In particular, the lender should
      review the following items to make a preliminary determination of the applicants’
      eligibility. x Applicant Characteristics (Chapter 8) Are the applicants able
      to secure conventional credit? Do the applicants own a dwelling? Are the applicants
      U.S. citizens or eligible non-U.S. citizens as detailed in Chapter 8? If the
      applicants are not U.S. citizens, they must produce evidence per Agency guidelines
      to qualify as a non-U.S. citizen. x Income (Chapter 9) At the time of loan approval,
      is the household''s adjusted income below the applicable moderate-income limit?
      To determine eligibility for the SFHGLP, the lender is responsible for documenting
      the income of all adult members of the applicants’ household (not just those
      who will be signatories to the note). Current income limits are referenced in
      Appendix 5, and can be located on the USDA Income and Property Eligibility website
      at HB-1-3555 (03-09-16) SPECIAL PN 5-2 Revised (05-05-25) PN 640 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. http://eligibility.sc.egov.usda.gov/eligibility/, or by using the Agency’s
      automated underwriting system, GUS. In addition to meeting adjusted annual income
      requirements, the applicants must also have sufficient repayment income and
      meet additional program requirements. Chapter 9 provides more detailed information
      about annual, adjusted, and repayment income. x Credit (Chapter 10) Is the credit
      history consistent with program guidelines? The applicants must have a credit
      history that demonstrates the ability and willingness to repay the loan. GUS
      is unable to render an underwriting recommendation on supplemental credit reports.
      These should be uploaded with the application package. x Ratios (Chapter 11)
      Do the applicants’ PITI (Principal, Interest, Taxes and Insurance) and total
      debt (TD) ratios fall at or below the limits established by the Agency? Ratios
      are calculated using repayment income from applicants who will be a party to
      the Promissory Note. x Appraised Value/Loan amount (Chapter 12) Is the loan
      amount supported by the appraisal’s fair market value? If there is not yet a
      current appraisal, is the loan amount expected to be supported by the appraisal?
      x Site and Property (Chapter 12) Does the property appear to be in an eligible
      rural area as designated by program guidelines? If warranted, did Agency staff
      confirm that the property location was rural? The Agency encourages lenders
      and those involved in the origination package to verify a property’s eligibility
      on the Agency’s property eligibility website. Property eligibility may be checked
      online at http://eligibility.sc.egov.usda.gov/eligibility/, or by using the
      Agency’s automated underwriting system, GUS. B. Informing the Applicant Before
      requesting a loan guarantee, the lender should take the following steps to ensure
      that applicants have a general understanding of the SFHGLP. x Concept of a loan
      guarantee. Describe to the applicants what a loan guarantee is, why it is used,
      and the benefits of a loan guarantee. Benefits include, but are not limited
      to, no required down payment and a fixed interest rate. x Loan guarantee fee
      (Chapter 16) Inform the applicants of the upfront guarantee fee to be paid at
      loan closing. HB-1-3555 (03-09-16) SPECIAL PN 5-3 Revised (05-05-25) PN 640
      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 Annual fee (Chapter 16) Inform the applicants
      of the annual guarantee fee, if applicable. x Occupancy (Chapter 8) Inform the
      applicants that they must occupy the property as their principal residence.
      x SFHGLP requirements. Inform the applicants of program requirements such as
      income limits, property location eligibility, debt ratio thresholds, and other
      requirements such as the certifications outlined on Form RD 3555-21, Request
      for Single Family Housing Loan Guarantee. 5.3 UTILIZING THE GUARANTEED UNDERWRITING
      SYSTEM [7 CFR 3555.107(b)] The Guaranteed Underwriting System (GUS) was developed
      to automate the process of credit risk evaluation for the SFHGLP. Automated
      underwriting (AU) systems are an efficient, consistent, objective, and accurate
      method of mortgage underwriting compared with traditional manual methods. GUS
      is a tool that helps evaluate the credit risk of the loan request. It compliments
      but DOES NOT replace the considered judgment of experienced underwriters. GUS
      incorporates applicants’ eligibility and underwriting requirements of this Handbook
      by utilizing a modified version of the Federal Housing Administration (FHA)
      mortgage scorecard known as Technology Open to Approved Lenders (TOTAL), concurrently
      with a rules based engine. GUS is accessed through a secure web-based automated
      underwriting environment at https://usdalinc.sc.egov.usda.gov/. GUS considers
      mortgage loan application data entered by the approved lender, credit repository
      data, and income and property information to evaluate the potential applicants’
      ability to meet a proposed mortgage obligation. GUS evaluates select components
      in a mortgage loan application and provides a credit evaluation and underwriting
      recommendation within seconds. GUS is not designed to evaluate the dependability
      of the applicants’ income proposed for repayment. This remains the underwriter’s
      responsibility to determine prior to final submission. Refer to Chapter 9 of
      this Handbook to determine adequate and dependable income for repayment ability.
      Lenders are reminded that data entered in GUS must coincide with that of the
      lender’s permanent loan file. A. Functionality of GUS Incorporated within the
      functionality of GUS are the following components: HB-1-3555 (03-09-16) SPECIAL
      PN 5-4 Revised (05-05-25) PN 640 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. Property and Income
      Eligibility x The dwelling offered as collateral for the proposed mortgage loan
      is located in an eligible rural area; and the applicants’ adjusted annual household
      income meets the adjusted income limits in accordance with size of household,
      county, and state in which the applicants will reside. Rules Based Engine x
      The Engine incorporates the guidelines found in this Handbook regarding originating
      SFHGLP loans. x Periodically new rules may be created to respond to issues analyzed
      within the SFHGLP portfolio. Scorecard x GUS uses a modified version of the
      FHA mortgage scorecard known as TOTAL, exclusive to Rural Development. x The
      scorecard has been validated and adjusted for SFHGLP use. x The TOTAL scorecard,
      including the modified version validated for SFHGLP use, is intellectual property
      that is proprietary to HUD. x Examples of factors considered under the scorecard
      include but are not limited to credit history, payment-to-income ratios, and
      loan-to-value ratios. x The scorecard allows favorable consideration to applicants
      that exhibit positive compensating factors such as available reserves for housing
      payments after loan closing. x Periodically the scorecard may be modified to
      react to the changing lending market. When modifications occur, loans remaining
      as a preliminary recommendation may not receive the same underwriting results
      upon a final submission. Credit Bureau Interface x GUS links with a number of
      credit providers nationwide. Users may link to a full list of credit providers
      at https://singlefamily.fanniemae.com/credit-information- providers. HB-1-3555
      (03-09-16) SPECIAL PN 5-5 Revised (05-05-25) PN 640 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 An interface occurs between GUS and the credit bureaus through a platform
      known as the Fannie Mae Credit Interface Service (CIS). x The interface is seamless
      to lenders and only acts as a conduit. An attempt to access information from
      all national credit repositories will occur, but GUS can complete its credit
      risk evaluation with information from only one repository. x New or re-issued
      credit can be pulled through GUS. x Credit reports pulled through GUS are valid
      for 120 days, unless the credit provider’s expiration is more restrictive. x
      Lenders are not required to be a Fannie Mae subscriber or partner to utilize
      the credit report interface in GUS. B. Gaining Access to GUS Approved lenders
      with active Lender Agreements must utilize GUS as part of their credit risk
      evaluation for all loan types supported by GUS. Lenders are required to enter
      into a User Agreement and obtain authorized access through the use of a Login.gov
      account and password. The GUS Lender User Guides may be obtained at: https://www.rd.usda.gov/resources/usda-linc-training-resource-library/guaranteed-
      underwriting-system. C. Underwriting Guidance for Lenders GUS evaluates the
      overall creditworthiness of the applicants based upon a number of credit variables
      and, when combined with remaining functionalities of GUS, indicates a recommended
      level of underwriting to determine a loan’s eligibility for a SFHGLP guarantee.
      GUS will conclude that the credit and capacity for repayment of the mortgage
      are acceptable or will refer the loan to the lender’s underwriter for further
      consideration, review, and manual underwriting. Regardless of the underwriting
      recommendation provided, the lender remains accountable for compliance with
      SFHGLP eligibility requirements, as well as any credit, capacity, and documentation
      requirements. Applicants should not be approved or denied a SFHGLP guarantee
      solely on the basis of a risk assessment generated by GUS. D. Compatible Loan
      Origination System (LOS) and Point of Sale (POS) Vendors A file import feature
      is available to create or update an application in GUS. GUS allows XML files
      meeting requirements of the Desktop Underwriter® Specification to be HB-1-3555
      (03-09-16) SPECIAL PN 5-6 Revised (05-05-25) PN 640 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.
      imported into the system. For additional guidance on file import requirements
      and the most recent version of the Desktop Underwriter® Specification permitted,
      the lender may refer to the GUS Lender User Guide, which can be found at: https://www.rd.usda.gov/resources/usda-linc-training-resource-library/guaranteed-
      underwriting-system. E. Cash Reserves Although cash reserves after closing are
      not required for the SFHGLP, cash reserves are considered in the risk assessment
      provided by GUS. When disclosing the assets of applicants on the “Assets and
      Liabilities” page of GUS, lenders have the responsibility to determine if the
      asset is liquid or readily converted to cash and can be done so absent retirement
      or job termination. Assets such as 40l(k)s, IRAs, etc. may be included in the
      underwriting analysis up to only 60 percent of the vested value. Funds borrowed
      against these accounts may be used for loan closing but are not to be considered
      as cash reserves. Gift funds from any source will not be included in the cash
      reserves calculation in GUS. Cash reserves are used for the purpose of qualifying
      applicants for a loan. Cash to close remains the lender’s responsibility to
      verify and document that applicants have sufficient funds to facilitate loan
      closing. Documentation will be retained in the lender’s permanent loan file.
      Assets should never be overvalued as it affects the risk assessment provided
      by the automated underwriting system and misrepresents the file presented for
      a Conditional Commitment for Loan Note Guarantee. Guidance on the calculation
      of reserves is explained in Chapter 9. Although assets must always be verified,
      in lieu of entering assets in GUS, the lender may underwrite to a more conservative
      approach, entering a lesser amount (the amount to demonstrate the applicant
      has the required funds for closing costs) or alternatively, with no consideration
      of assets on the “Assets and Liabilities” page and underwriting recommendation.
      Assets may also influence program eligible income. Refer to Paragraph 9.4 of
      Chapter 9 for additional information regarding assets and program eligible income.
      F. Omitting Liabilities If a lender omits an adverse trade line when utilizing
      GUS and receives an Accept underwriting recommendation, the applicants’ explanation
      letter and supportive documentation of adverse trade lines will be retained
      by the lender. The lender will indicate the justification for the omission in
      the “If Omit, please specify” section of the “Asset and Liabilities” page. HB-1-3555
      (03-09-16) SPECIAL PN 5-7 Revised (05-05-25) PN 640 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.
      G. Established Data Tolerances Loan application data submitted to the Agency
      must reflect a true and accurate representation of the loan to be closed. This
      data must match the loan file submitted to the Agency when requesting the Conditional
      Commitment for Loan Note Guarantee or fall within the tolerances established
      by the Agency. A tolerance threshold has been established when an increase in
      obligations do not exceed a cumulative total of $50. Examples of these obligations
      include, but are not limited to, installment loans, revolving credit lines,
      real estate taxes, final homeowner’s insurance premiums, etc. Loan files that
      have received a Conditional Commitment for Loan Note Guarantee do not require
      updated underwriting or resubmission of GUS when the cumulative total of obligations
      increase, but do not exceed the established thresholds. This tolerance threshold
      applies to situations where an increase in monthly debt provided on the loan
      application at time of Conditional Commitment differs from the amount recorded
      at loan closing. Tax and Insurance Escrows: Approved lenders must ensure that
      an accurate estimate for the property tax/insurance component of the applicants’
      monthly mortgage payment is utilized when submitting loan applications to the
      Agency. The threshold policy should not be construed to allow lender manipulation
      of escrow variables to obtain approvals. Care must be taken to assume a realistic
      estimate is used for computing the monthly escrowed amount. For existing properties,
      the escrowed amount for real estate taxes is based on the actual taxes assessed.
      For new construction, tax estimates must be based on the land and completed
      improvements, not just on the land value (i.e. value of both the property and
      the completed dwelling). The lender may contact the taxing authority which has
      jurisdiction over the property to obtain an estimate of the taxes to be assessed
      for newly constructed homes. The Agency reserves the right to request and review
      files from lenders that are suspected of purposely underestimating tax and insurance
      payments in order to secure a commitment or loan guarantee. Income: Verification
      of income must be obtained prior to final submission. Therefore, data entered
      in GUS must be supported with verifying documentation of income in the lender’s
      permanent loan file. Income must be verified and documented in accordance with
      Chapter 9 of this Handbook. Liquid Assets: Asset data reflected in GUS must
      be supported by verification documentation. The final submission will reflect
      the verified amount. Guidance regarding verifying assets can be found in Attachment
      9-A. HB-1-3555 (03-09-16) SPECIAL PN 5-8 Revised (05-05-25) PN 640 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. H. GUS Findings and Underwriting Report The responsibilities associated
      with producing loans of acceptable quality for loans guaranteed by the Agency
      remains the same for a GUS evaluated loan or a manually underwritten loan. When
      a lender enters mortgage loan data into GUS and requests a loan underwriting
      evaluation, a two part underwriting summary is delivered to the lender through
      a GUS Underwriting Findings Report. The first portion of the underwriting summary
      will render an underwriting recommendation of Accept, Accept with Full Documentation,
      Refer, Refer with Caution, or Ineligible. The underwriting recommendation is
      followed by a risk evaluation of Eligible, Ineligible, or Unable to Determine.
      The second portion represents a combined analysis of property, income, loan
      eligibility, and the applicants’ eligibility. The GUS Findings and Underwriting
      Report provides important feedback messages and conditions for the loan. The
      lender must review the final findings, comply with the conditions, and provide
      the Agency with any additional documents, as applicable. The final GUS Findings
      and Underwriting Report must be retained in the lender’s permanent loan file.
      Non-GUS submissions, Accept with Full Documentation, Refer, and Refer with Caution
      files will be accompanied by Attachment 9-B, the Uniform Transmittal Summary
      (FNMA Form 1008/Freddie Mac Form 1077), or equivalent. The documentation provided
      must include calculations for annual, adjusted, and repayment income. Further
      clarification regarding income can be found in Chapter 9. The Agency commitment
      will reference the GUS underwriting findings report as a condition of guarantee
      loan approval. I. Lender Steps When Requesting a Commitment 1. Ensure the data
      entered in GUS is true, complete, accurate, and supported by the documents retained
      in the lender’s permanent loan file. 2. The approved lender’s underwriter must
      review and confirm the entire loan package meets SFHGLP requirements. 3. The
      lender should verify all required documents have been successfully uploaded
      per Attachment 15-A, Loan Origination Checklist. Underwriting documents should
      be combined into a single black and white file. The appraisal report must be
      uploaded as a separate color file. 4. Submit the file in GUS as a “Final Submission”
      to electronically transmit the loan application to the Agency. HB-1-3555 (03-09-16)
      SPECIAL PN 5-9 Revised (05-05-25) PN 640 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. 5. If the
      loan is a “Refer” or “Refer with Caution,” the lender’s underwriter must manually
      underwrite the loan to determine if the applicants are creditworthy, in accordance
      with SFHGLP credit policies and guidelines. If approved, the lender’s underwriter
      will submit the file in GUS as a “Final Submission” to electronically transmit
      the loan application to the Agency. Additional documents are required for loans
      receiving a “Refer,” “Refer with Caution” or “Full Documentation” recommendation.
      6. Loans that are unsupported by GUS must be manually submitted and underwritten;
      however, the associated documents must be uploaded via GUS. Follow the instructions
      on the “Manual Submission Job Aid” for this type of submission in the USDA LINC
      Training and Resource Library located at https://www.rd.usda.gov/resources/usda-linc-training-resource-library
      in the “Loan Origination” tab “Documents and Resources,” “Manual Submission
      Job Aid.” J. GUS Underwriting Recommendations Based on the analysis of credit,
      capacity, and other loan characteristics, GUS will render an underwriting recommendation.
      The recommendation is based upon the data entered in GUS with the representation
      from the lender that the data is true, complete, accurate, and verified. The
      following represent possible underwriting recommendations with guidance on documentation
      to be submitted to the Agency when requesting a Conditional Commitment for Loan
      Note Guarantee. ACCEPT/ELIGIBLE Underwriting Recommendation Minimal documentation
      provisions apply to GUS underwriting recommendations that receive an Accept,
      unless a quality control message on the GUS Underwriting Findings Report indicates
      an Accept with Full Documentation file is required. A quality control message
      requiring a full documentation file will appear on the GUS Underwriting Findings
      Report upon final submission. Lenders should submit full additional documentation
      files as noted in Attachment 15-A, Loan Origination Checklist, for files for
      that receive GUS underwriting recommendations of Accept with Full Documentation.
      Accurate data is the responsibility of the approved lender. By submitting the
      mortgage loan application request through GUS as a final submission, the lender
      is representing that the data input is true, complete, accurate, and verified.
      Underwriting is the responsibility of the approved lender. Lenders are required
      to review the results of the GUS Underwriting Findings Report and credit reports.
      If necessary, make data changes and resubmit the loan to GUS. Approved lenders
      then make a lending decision using the Findings Report obtained from GUS, credit
      report(s), stable and dependable income, employment, assets, collateral, and
      other file documentation. HB-1-3555 (03-09-16) SPECIAL PN 5-10 Revised (05-05-25)
      PN 640 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. During the review process, should data
      appear to be questionable, the Agency reserves the right to request further
      supportive information. Files may be selected for full file review if the lender
      is a new user to GUS, has demonstrated a disregard for Agency policies and procedures,
      has a high first year delinquency rate, or loss payments in excess of the national
      average. Randomly, full documentation of a file in lieu of minimal documentation
      noted above will be requested when receiving an underwriting recommendation
      of Accept. This random selection is for quality control purposes. A message
      on the lender’s final pass of underwriting will confirm when a full documentation
      file is required. Full file documentation reviews are to confirm the data input
      into the GUS file accurately reflects that of the lender’s file and documentation.
      Mortgage loan documents will be delivered electronically through GUS. In cases
      when the system may be unavailable, or a transition to the system is occurring,
      documents may be delivered by encrypted email to the appropriate production
      team at https://www.rd.usda.gov/resources/usda-linc-training-library/loan-processing.
      It is anticipated that all lenders will utilize the automated method when available.
      ACCEPT/INELIGIBLE Underwriting Recommendation Loans receiving this recommendation
      have been determined as meeting the SFHGLP risk standards for loan guarantee;
      however, do not meet certain eligibility guidelines. Typical reasons for an
      Accept/Ineligible recommendation may include: x Property is not located in a
      rural area x Income exceeds Agency guidelines x Non-owner occupied transaction
      Loans that receive a recommendation of Accept/Ineligible may still be eligible
      for a SFHGLP loan guarantee. To achieve eligibility, the lender’s underwriter
      should analyze the findings report and determine the basis for the ineligibility
      and determine if the reason for ineligibility can be resolved in order to comply
      with Agency guidelines. Issues that caused the loan to be ineligible may be
      resubmitted to obtain an updated underwriting recommendation. REFER or REFER
      WITH CAUTION Underwriting Recommendation GUS loans receiving an underwriting
      recommendation of Refer or Refer with Caution will require the lender’s underwriter
      to perform a manual underwriting evaluation of the mortgage loan application
      to determine if applicants are creditworthy in accordance with SFHGLP credit
      policies and guidelines. Risk factors have been identified based upon the data
      entered in GUS. The credit risk evaluation represented by a Refer with Caution
      is HB-1-3555 (03-09-16) SPECIAL PN 5-11 Revised (05-05-25) PN 640 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. greater than the credit risk of loans that receive a Refer. Lenders should
      practice extreme care in their underwriting analysis and decisions when underwriting
      a loan file receiving a Refer or Refer with Caution recommendation. Lenders
      must submit additional documentation as noted in Attachment 15-A of this Handbook
      for files that receive GUS underwriting recommendations of Refer or Refer with
      Caution. Credit documentation, mitigating circumstances, and compensating factors
      considered in the manual underwriting analysis should be recorded in the lender’s
      permanent loan file. Compensating factors considered in the evaluation of the
      mortgage loan application should be documented on the underwriting analysis
      and summary (typically the Uniform Underwriting Transmittal Summary – FNMA Form
      1008/Freddie Mac Form 1077 or equivalent). Loans should not be approved or denied
      solely on the basis of a risk evaluation generated by GUS. Mitigating circumstances
      according to Agency standard guidelines may be considered. K. Lender’s Reliance
      on the GUS System Lenders represent and agree that they will not rely principally
      or exclusively on the GUS system in determining whether credit will or will
      not be extended to any applicants. The lender remains responsible for the loan
      qualifying decision in addition to eligibility of the household for the SFHGLP.
      L. Lender’s Permanent Loan File - Documentation Requirements The lender’s permanent
      loan files must be supported with the following verified documentation, regardless
      of the GUS recommendation: x Credit history; x Adjusted Annual Income – determined
      for program eligibility; x Stable and Dependable Income – determined for repayment
      and qualifying purposes; x Assets – for income calculation, conventional credit
      test, and compensating factor analysis; x Collateral requirements; and x Any
      other documentation supporting the mortgage loan request. Stable and dependable
      income will be documented in accordance with Chapter 9 of this Handbook and
      remains the responsibility of the lender. GUS does not evaluate or HB-1-3555
      (03-09-16) SPECIAL PN 5-12 Revised (05-05-25) PN 640 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.
      predict the stability of the applicants’ continuance of income. This determination
      is performed by the lender prior to final submission of an application. M. Resubmission
      Policy The lender is responsible for the integrity of the data used to obtain
      an underwriting evaluation in GUS. If data changes during the loan application
      stage, after Conditional Commitment or prior to loan closing, the GUS underwriting
      recommendation could be compromised. Lenders are responsible for resubmitting
      the loan to GUS when material changes are discovered. Lenders must follow the
      Conditional Commitment guidance outlined in Paragraph 15.7 of Chapter 15 of
      this Handbook prior to closing a loan. Any request to release GUS for data updates
      after issuance of a Conditional Commitment will be treated as a new request,
      processed in date order of applications received. Under the following conditions,
      lenders must resubmit the loan through GUS for an updated evaluation: x Applicants
      were either added or deleted from the loan application or critical information
      has changed. x A decrease in the applicants’ income and/or cash assets/reserves.
      x An increase in loan amount or interest rate on the mortgage loan request.
      x Any changes that would negatively affect the applicants’ ability to repay
      the mortgage. The lender should submit a request via e-mail to the appropriate
      production team at https://www.rd.usda.gov/resources/usda-linc-training-library/loan-processing,
      requesting the loan be released from the Agency to the lender. The lender should
      modify the data and resubmit the loan through GUS for an updated final evaluation
      underwriting recommendation. Some data changes do not affect the outcome of
      an underwriting recommendation. Once a mortgage loan has been sent to the Agency
      as a “Final Submit,” the following data changes do not require that the GUS
      loan application be updated: x A decrease in loan interest rate x A decrease
      in loan amount x A decrease of mortgage or personal liabilities HB-1-3555 (03-09-16)
      SPECIAL PN 5-13 Revised (05-05-25) PN 640 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 An increase
      of assets x The bureau update of a credit report due to the expiration of the
      credit report (expires at 120 days prior to loan closing) after a final submit
      has occurred by the lender and a Conditional Commitment has been issued; yet
      prior to loan closing as long as no adverse impact has occurred that would affect
      the outcome of the underwriting recommendation. The lender must retain the updated
      credit report in their permanent loan file. N. Lender’s Representations to the
      Agency upon Final Submission The lender represents as of the date of final submission
      to the Agency the following: x All terms, conditions and requirements of the
      SFHGLP are fully satisfied. x All representations submitted by the lender are
      true, correct, and verified. x The lender is in compliance with the criteria
      outlined in Chapter 3 and eligible to participate in the SFHGLP and utilize
      the GUS System. x The lender has not misstated or omitted any material fact
      about the mortgage loan request for guarantee. x Applicable laws, including
      state laws, terms of the note, and security instruments have been correctly
      and timely disclosed to all applicants. x The lender represents that all persons
      executing documents on behalf of the lender are duly authorized to do so. O.
      Termination The Agency reserves the right to terminate the lender’s approved
      lender status in the event of any default under the terms of the lender agreement.
      A lender’s suspension, withdrawal, or termination of approval to participate
      in the SFHGLP may be pursued if (not all inclusive): x A lender fails to provide
      the Agency with information that is true, complete and accurate. x Omission
      of any material fact on any application, other documents, or oral representation
      made to the Agency when seeking a Loan Note Guarantee. HB-1-3555 (03-09-16)
      SPECIAL PN 5-14 Revised (05-05-25) PN 640 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 A lender
      has a 30-, 60-, or 90- day delinquency rate or loss claim rate more than 50%
      higher than the average 30-, 60-, or 90- day delinquency rate or loss claim
      for all guarantees issued in the Agency’s portfolio. This can be measured within
      a geographic area of the nation. x Misuse of GUS in accordance with terms and
      conditions of the agreement to utilize the System. Emphasis of any evaluation
      conducted will be placed on the risk that the loan(s) poses to the Agency. Agency
      Actions x Initially, contact the lender to ensure a firm understanding of the
      lender’s terms and conditions of the lender agreement. Firm evidence of any
      violations must be discussed and addressed. x Follow up the initial communication
      with a written notice outlining the agreed upon plan to improve. x Allow a lender
      a reasonable time frame to institute a remedy and represent improvement to the
      identified findings. x Monitor the lender for improvement. x After continued
      evaluation of findings and results to improve, if the lender fails to comply,
      their approved lender status may be revoked. HB-1-3555 (03-09-16) SPECIAL PN
      6-1 Revised (05-05-25) PN 640 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. CHAPTER 6: LOAN
      PURPOSES 7 CFR 3555.101'
  judgment: false
