source:
  type: guide
  id: usda-hb-3555-4.2
  authority: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶4.2 —
    Operate Responsibly
  description: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶4.2
    — Operate Responsibly.
  coverage_tier: operative
obligations:
- id: usda-hb-3555-4.2-full
  canonical_id: usda-hb-3555-4.2-full
  section: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶4.2 — Operate
    Responsibly
  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 ¶4.2
      — Operate Responsibly
    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: '4.2 OPERATE RESPONSIBLY The lender must: x Operate in a prudent
      and businesslike manner. A lender that maintains approval from Fannie Mae, Freddie
      Mac, VA, or HUD (as outlined in Chapter 3 of this Handbook) is presumed to act
      responsibly if all elements of the Lender Agreement are maintained. x Establish
      and maintain adequate written policies for loan origination, underwriting, servicing,
      and quality control. Refer to Chapter 3 for additional guidance on quality control
      plans. It must be compliant for the organization on which approval is based
      and include a representative sampling of SFHGLP loans. The lender must provide
      copies of the quality control plan for Agency review. x Avoid Conflicts of Interest.
      Individuals that have a direct impact on the mortgage transaction (i.e. underwriters,
      appraisers, inspectors, engineers, etc.) are prohibited from having multiple
      roles or multiple sources of income, either directly or indirectly, in a single
      Rural Development transaction. Examples of indirect compensation include, but
      are not limited to, compensation resulting from HB-1-3555 (03-09-16) SPECIAL
      PN 4-2 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 an ownership interest
      in another business that is party to the same Rural Development transaction
      or compensation earned by a spouse, domestic partner, or other family member
      that has a role in the same Rural Development transaction. Individuals that
      do not have a direct impact on the mortgage approval decision may have multiple
      roles or sources of compensation from the same Rural Development transaction.
      Individuals with a role in the mortgage transaction who are also the applicant
      may not participate in any part of the loan origination, approval, or closing
      process on behalf of the lender. Lenders remain responsible for complying with
      all applicable Federal lending laws.'
  judgment: false
