source:
  type: regulation
  id: usda-hb-3555-12.28
  authority: USDA Technical Handbook HB-1-3555 §12.28 — Rehabilitation And Repair With Purchase Of Existing
  description: "USDA HB-1-3555 §12.28 (Rehabilitation And Repair With Purchase Of Existing). Gap-fill (verbatim).\
    \ \n"
obligations:
- id: usda-hb-3555-12.28-0
  canonical_id: usda-hb-3555-12.28-0
  section: USDA HB-1-3555 12.28 — Rehabilitation And Repair With Purchase Of Existing
  description: '12.28 Rehabilitation And Repair With Purchase Of Existing: HABILITATION AND REPAIR WITH PURCHASE
    OF EXISTING DWELLINGS The rehabilitation and repair feature of the SFHGLP allows borrowers to finance the cost
    of repairs to improve an existing dwelling at the time of purchase. The maximum loan amount cannot exceed the
    cost of acquisition p…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - usda-hb-3555
  - section-complete
  primary_source:
    tier: 1
    authority: USDA Technical Handbook HB-1-3555 §12.28 — Rehabilitation And Repair With Purchase Of Existing
    source_class: usda-handbook-hb-1-3555
    source_url: https://www.rd.usda.gov/resources/directives/handbooks
    snapshot_id: 0466acd1ea2d17a4
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:22ac6f998ff72578e318fca138ebe80fb18ae2fc701eb5936172f1842679a13a
    paragraph_quote: HABILITATION AND REPAIR WITH PURCHASE OF EXISTING DWELLINGS The rehabilitation and repair feature
      of the SFHGLP allows borrowers to finance the cost of repairs to improve an existing dwelling at the time
      of purchase. The maximum loan amount cannot exceed the cost of acquisition plus the cost of repairs up to
      the as- improved market value, plus the guarantee fee, if financed. The borrower obtains one loan at a fixed
      interest rate to finance both the acquisition and the rehabilitation of the property. The loan is guaranteed
      after the loan has closed, prior to the completion of the repairs, which minimizes the risk to the lender.
      In GUS, the lender will select Purchase as the loan purpose type on the Loan and Property Information page.
      On the Lender Loan Information page, the lender will identify the transaction as Renovation, Construction-
    drafter_attestation: Verbatim from HB-1-3555 §12.28 body (max-gap occurrence), snapshot 0466acd1ea2d17a4; substring-verified.
  judgment: false
- id: usda-hb-3555-12.28-1
  canonical_id: usda-hb-3555-12.28-1
  section: USDA HB-1-3555 12.28 — Rehabilitation And Repair With Purchase Of Existing
  description: '12.28 Rehabilitation And Repair With Purchase Of Existing: 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.…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - usda-hb-3555
  - section-complete
  primary_source:
    tier: 1
    authority: USDA Technical Handbook HB-1-3555 §12.28 — Rehabilitation And Repair With Purchase Of Existing
    source_class: usda-handbook-hb-1-3555
    source_url: https://www.rd.usda.gov/resources/directives/handbooks
    snapshot_id: 0466acd1ea2d17a4
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:22ac6f998ff72578e318fca138ebe80fb18ae2fc701eb5936172f1842679a13a
    paragraph_quote: 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. Conversion/Construction-to-Permanent
      and select the Single-Closing radio button. On the Additional Data page, “Purchase is” field equals Existing.
      Unless otherwise specified, the rehabilitation and repair construction loan process should be closed and managed
      following the same procedures described in the single- close feature for new construction. Lenders may utilize
    drafter_attestation: Verbatim from HB-1-3555 §12.28 body (max-gap occurrence), snapshot 0466acd1ea2d17a4; substring-verified.
  judgment: false
- id: usda-hb-3555-12.28-2
  canonical_id: usda-hb-3555-12.28-2
  section: USDA HB-1-3555 12.28 — Rehabilitation And Repair With Purchase Of Existing
  description: '12.28 Rehabilitation And Repair With Purchase Of Existing: 2-E, Repair Escrow and Rehabilitation
    & Repair with Purchase Comparison, when determining how repairs or rehabilitation to properties may be financed.
    B. Type of Loans 1. Non-Structural Repairs up to $75,000 This feature allows borrowers to finance up to $75,000
    for repairs such …'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - usda-hb-3555
  - section-complete
  primary_source:
    tier: 1
    authority: USDA Technical Handbook HB-1-3555 §12.28 — Rehabilitation And Repair With Purchase Of Existing
    source_class: usda-handbook-hb-1-3555
    source_url: https://www.rd.usda.gov/resources/directives/handbooks
    snapshot_id: 0466acd1ea2d17a4
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:22ac6f998ff72578e318fca138ebe80fb18ae2fc701eb5936172f1842679a13a
    paragraph_quote: 2-E, Repair Escrow and Rehabilitation & Repair with Purchase Comparison, when determining how
      repairs or rehabilitation to properties may be financed. B. Type of Loans 1. Non-Structural Repairs up to
      $75,000 This feature allows borrowers to finance up to $75,000 for repairs such as those identified by a home
      inspector or appraiser. There is no required minimum repair amount. The repairs must be non-structural, and
      the home must be considered habitable within 30 days of closing to be eligible for this feature. Since the
      dwelling will be habitable within 30 days of closing, the loan is not eligible for reserve accounts for PITI
      payments during the construction period. The timeframe for the repairs to be completed should typically not
      exceed 10 months, however, may be extended at the lender’s discretion. 2. Structural Repairs and Repairs Exceeding
      $75,000 This feature allows borrowers to finance structural repairs or improvements greater than $75,000 for
      extensive rehabilitation. If the dwelling is not habitable at the time of closing, reserves for principal,
      interest, taxes, and insurance may be established to cover the mortgage payments for up to 10 months, or until
      the home is determined to be habitable by a third-party inspector deemed qualified by the lender during the
      construction period. While the reserve period should typically not exceed 10 months, contract deadline extensions
      may be approved at the lender's discretion. C. Property Eligibility New construction or incomplete constructions
      are not eligible. Evidence that the home has been completed for 12 months or older must be obtained. Evidence
      of
    drafter_attestation: Verbatim from HB-1-3555 §12.28 body (max-gap occurrence), snapshot 0466acd1ea2d17a4; substring-verified.
  judgment: false
- id: usda-hb-3555-12.28-3
  canonical_id: usda-hb-3555-12.28-3
  section: USDA HB-1-3555 12.28 — Rehabilitation And Repair With Purchase Of Existing
  description: '12.28 Rehabilitation And Repair With Purchase Of Existing: 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.…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - usda-hb-3555
  - section-complete
  primary_source:
    tier: 1
    authority: USDA Technical Handbook HB-1-3555 §12.28 — Rehabilitation And Repair With Purchase Of Existing
    source_class: usda-handbook-hb-1-3555
    source_url: https://www.rd.usda.gov/resources/directives/handbooks
    snapshot_id: 0466acd1ea2d17a4
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:22ac6f998ff72578e318fca138ebe80fb18ae2fc701eb5936172f1842679a13a
    paragraph_quote: '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. completion such as a Certificate of Occupancy
      or documentation from local taxing entities is acceptable. If the dwelling must be demolished as part of the
      rehabilitation, the complete existing foundation must still be in place and will be used. Properties where
      the foundation has been demolished or where only the footings remain, are not eligible. Evidence by a licensed
      engineer that the existing foundation is structurally sound and supports the proposed construction will be
      required. The new dwelling to be placed on the existing foundation, including manufactured housing, must meet
      all program requirements. 1. Prohibited Loan Purposes x Installation of new inground swimming pools, hot tubs,
      or saunas; x Repairs to condominiums; x Converting structures to SFH dwellings (barns, schoolhouses, etc.);
      x Alterations that allow income-producing features; x Installation of luxury items (exterior fireplaces and
      kitchens, etc.); and x Repairs or improvements to common space areas (community meeting rooms, playgrounds,
      etc.) 2. Eligible Loan Costs Loan proceeds must be used for the acquisition of the land and dwelling plus
      the total amount for repairs that include but are not limited to: x Removing safety and health hazards; x
      Making the dwelling accessible to persons with disabilities; x Repair or installation of septic system and
      water wells; x Additions, structural alterations, or reconstruction of an existing dwelling;'
    drafter_attestation: Verbatim from HB-1-3555 §12.28 body (max-gap occurrence), snapshot 0466acd1ea2d17a4; substring-verified.
  judgment: false
- id: usda-hb-3555-12.28-4
  canonical_id: usda-hb-3555-12.28-4
  section: USDA HB-1-3555 12.28 — Rehabilitation And Repair With Purchase Of Existing
  description: '12.28 Rehabilitation And Repair With Purchase Of Existing: 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.…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - usda-hb-3555
  - section-complete
  primary_source:
    tier: 1
    authority: USDA Technical Handbook HB-1-3555 §12.28 — Rehabilitation And Repair With Purchase Of Existing
    source_class: usda-handbook-hb-1-3555
    source_url: https://www.rd.usda.gov/resources/directives/handbooks
    snapshot_id: 0466acd1ea2d17a4
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:22ac6f998ff72578e318fca138ebe80fb18ae2fc701eb5936172f1842679a13a
    paragraph_quote: 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 Addition of a garage, attached or detached;
      x Modernizations (kitchens and bathrooms, interior floor cover, exterior siding, etc.); x Installation of
      energy conservation or weatherization features; x Repairs to existing swimming pools, hot tubs, or saunas;
      and x Repairs to accessory dwelling units. Applicable soft costs as defined in
    drafter_attestation: Verbatim from HB-1-3555 §12.28 body (max-gap occurrence), snapshot 0466acd1ea2d17a4; substring-verified.
  judgment: false
- id: usda-hb-3555-12.28-5
  canonical_id: usda-hb-3555-12.28-5
  section: USDA HB-1-3555 12.28 — Rehabilitation And Repair With Purchase Of Existing
  description: '12.28 Rehabilitation And Repair With Purchase Of Existing: 2.15 are allowable in addition to: x
    Contingency reserves; 10% when utilities are on, 15% when they are off for all transactions; x Principal, Interest,
    Tax, and Insurance payments for up to ten months for reserves, when applicable; and x Inspection/Consultant
    fees, if applicable…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - usda-hb-3555
  - section-complete
  primary_source:
    tier: 1
    authority: USDA Technical Handbook HB-1-3555 §12.28 — Rehabilitation And Repair With Purchase Of Existing
    source_class: usda-handbook-hb-1-3555
    source_url: https://www.rd.usda.gov/resources/directives/handbooks
    snapshot_id: 0466acd1ea2d17a4
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:22ac6f998ff72578e318fca138ebe80fb18ae2fc701eb5936172f1842679a13a
    paragraph_quote: '2.15 are allowable in addition to: x Contingency reserves; 10% when utilities are on, 15%
      when they are off for all transactions; x Principal, Interest, Tax, and Insurance payments for up to ten months
      for reserves, when applicable; and x Inspection/Consultant fees, if applicable. D. Managing Construction Originating
      lenders do not need to have construction experience if the servicing lender will administer the construction
      phase. Servicing lenders must meet the requirements outlined in'
    drafter_attestation: Verbatim from HB-1-3555 §12.28 body (max-gap occurrence), snapshot 0466acd1ea2d17a4; substring-verified.
  judgment: false
- id: usda-hb-3555-12.28-6
  canonical_id: usda-hb-3555-12.28-6
  section: USDA HB-1-3555 12.28 — Rehabilitation And Repair With Purchase Of Existing
  description: '12.28 Rehabilitation And Repair With Purchase Of Existing: 2.13. Builder/contractors must meet the
    requirement outlined in'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - usda-hb-3555
  - section-complete
  primary_source:
    tier: 1
    authority: USDA Technical Handbook HB-1-3555 §12.28 — Rehabilitation And Repair With Purchase Of Existing
    source_class: usda-handbook-hb-1-3555
    source_url: https://www.rd.usda.gov/resources/directives/handbooks
    snapshot_id: 0466acd1ea2d17a4
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:22ac6f998ff72578e318fca138ebe80fb18ae2fc701eb5936172f1842679a13a
    paragraph_quote: 2.13. Builder/contractors must meet the requirement outlined in
    drafter_attestation: Verbatim from HB-1-3555 §12.28 body (max-gap occurrence), snapshot 0466acd1ea2d17a4; substring-verified.
  judgment: false
- id: usda-hb-3555-12.28-7
  canonical_id: usda-hb-3555-12.28-7
  section: USDA HB-1-3555 12.28 — Rehabilitation And Repair With Purchase Of Existing
  description: '12.28 Rehabilitation And Repair With Purchase Of Existing: 2.14. The borrower may not act as the
    general contractor. A pre- construction conference with all parties is strongly encouraged. The lender may engage
    any inspector or consultant deemed qualified by the lender to evaluate the property, write up the necessary
    improvements, conduc…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - usda-hb-3555
  - section-complete
  primary_source:
    tier: 1
    authority: USDA Technical Handbook HB-1-3555 §12.28 — Rehabilitation And Repair With Purchase Of Existing
    source_class: usda-handbook-hb-1-3555
    source_url: https://www.rd.usda.gov/resources/directives/handbooks
    snapshot_id: 0466acd1ea2d17a4
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:22ac6f998ff72578e318fca138ebe80fb18ae2fc701eb5936172f1842679a13a
    paragraph_quote: '2.14. The borrower may not act as the general contractor. A pre- construction conference with
      all parties is strongly encouraged. The lender may engage any inspector or consultant deemed qualified by
      the lender to evaluate the property, write up the necessary improvements, conduct periodic inspections, and
      to act as a liaison between the borrower, builder, and lender. x Inspector/Consultant fees: For structural
      repairs and those exceeding $75,000, an inspector will perform a thorough inspection of the property and prepare
      a detailed write-up of the work to be repaired and include estimated costs for labor and materials and associated
      fees that are customary and typical for the area. This write-up will be used to obtain cost estimates from
      contractors. Inspectors or'
    drafter_attestation: Verbatim from HB-1-3555 §12.28 body (max-gap occurrence), snapshot 0466acd1ea2d17a4; substring-verified.
  judgment: false
- id: usda-hb-3555-12.28-8
  canonical_id: usda-hb-3555-12.28-8
  section: USDA HB-1-3555 12.28 — Rehabilitation And Repair With Purchase Of Existing
  description: '12.28 Rehabilitation And Repair With Purchase Of Existing: 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.…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - usda-hb-3555
  - section-complete
  primary_source:
    tier: 1
    authority: USDA Technical Handbook HB-1-3555 §12.28 — Rehabilitation And Repair With Purchase Of Existing
    source_class: usda-handbook-hb-1-3555
    source_url: https://www.rd.usda.gov/resources/directives/handbooks
    snapshot_id: 0466acd1ea2d17a4
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:22ac6f998ff72578e318fca138ebe80fb18ae2fc701eb5936172f1842679a13a
    paragraph_quote: '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. consultants are selected by the lender.
      An inspector or consultant is not required for non-structural repairs of $75,000 or less. x Cost Estimate:
      The borrower must obtain a detailed and fixed cost estimate that fully describes the work being performed
      to include itemized costs for labor and material. The cost estimate must identify the borrower’s name, subject
      property address, contractor’s name, contact information, and license number, where applicable. For work repairs
      $75,000 or less, the cost estimate must indicate that the repairs are non-structural. x Appraisals: The appraisal
      report must support the “As Improved” market value of the property with the assumption that all repairs are
      completed. A copy of the original write-up or the cost estimate including reserves will be provided to the
      appraiser. x Construction Period: The construction period should typically not exceed 10 months from the date
      of closing for all transactions. However, contract deadline extensions may be approved at the lender’s discretion.
      x Construction Contract: The lender must ensure the utilization of a fixed price contract. The total amount
      in the construction contract must match the total cost breakdown of the bid proposal, must have a start and
      end date, must be signed by the contractor and borrower(s) and must be referenced and made part of the Security
      Instrument. x Additions: New structures or additions to the existing dwelling must comply with local codes
      and applicable national codes. x Unpermitted work: When unpermitted work is discovered in the existing dwelling,
      the lender must ensure that the owner and/or contractor contact the appropriate code enforcement office to
      obtain retroactive permitting or devise a plan to permit the previous construction. The lender must ensure
      that the borrower obtains a rehabilitation loan permit certification prior to the loan closing so that all
      permit fees associated with the new and/or previous construction are included in the total bid. x PITI Reserve:
      The lender will be responsible for making the borrower’s monthly'
    drafter_attestation: Verbatim from HB-1-3555 §12.28 body (max-gap occurrence), snapshot 0466acd1ea2d17a4; substring-verified.
  judgment: false
- id: usda-hb-3555-12.28-9
  canonical_id: usda-hb-3555-12.28-9
  section: USDA HB-1-3555 12.28 — Rehabilitation And Repair With Purchase Of Existing
  description: '12.28 Rehabilitation And Repair With Purchase Of Existing: 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.…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - usda-hb-3555
  - section-complete
  primary_source:
    tier: 1
    authority: USDA Technical Handbook HB-1-3555 §12.28 — Rehabilitation And Repair With Purchase Of Existing
    source_class: usda-handbook-hb-1-3555
    source_url: https://www.rd.usda.gov/resources/directives/handbooks
    snapshot_id: 0466acd1ea2d17a4
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:22ac6f998ff72578e318fca138ebe80fb18ae2fc701eb5936172f1842679a13a
    paragraph_quote: 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. PITI payments during the period of rehabilitation,
      up to a maximum of 10 months or when the dwelling is determined to be habitable by a qualified third-party
      inspector.
    drafter_attestation: Verbatim from HB-1-3555 §12.28 body (max-gap occurrence), snapshot 0466acd1ea2d17a4; substring-verified.
  judgment: false
