source:
  type: regulation
  id: usda-hb-3555-12.12
  authority: USDA Technical Handbook HB-1-3555 §12.12 — Single-Close Features
  description: "USDA HB-1-3555 §12.12 (Single-Close Features). Gap-fill (verbatim). \n"
obligations:
- id: usda-hb-3555-12.12-0
  canonical_id: usda-hb-3555-12.12-0
  section: USDA HB-1-3555 12.12 — Single-Close Features
  description: '12.12 Single-Close Features: NGLE-CLOSE FEATURES A single-close loan combines the features of a
    construction loan, which is a short- term interim loan for financing the cost of construction, and the traditional
    long-term permanent residential mortgage. The approved lender makes the loan to an eligible applic…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - usda-hb-3555
  - section-complete
  primary_source:
    tier: 1
    authority: USDA Technical Handbook HB-1-3555 §12.12 — Single-Close Features
    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: NGLE-CLOSE FEATURES A single-close loan combines the features of a construction loan, which
      is a short- term interim loan for financing the cost of construction, and the traditional long-term permanent
      residential mortgage. The approved lender makes the loan to an eligible applicant. There is a one-time closing
      prior to the start of construction. At closing, funds are disbursed to cover the cost of land and applicable
      closing costs, subject to the maximum loan to value. The lender will be responsible for managing the disbursement
      of the loan proceeds during construction to the builder/contractor from custodial account known as the "lenders
      construction holdback." Written approval from the borrower must
    drafter_attestation: Verbatim from HB-1-3555 §12.12 body (max-gap occurrence), snapshot 0466acd1ea2d17a4; substring-verified.
  judgment: false
- id: usda-hb-3555-12.12-1
  canonical_id: usda-hb-3555-12.12-1
  section: USDA HB-1-3555 12.12 — Single-Close Features
  description: '12.12 Single-Close Features: 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 §12.12 — Single-Close Features
    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. be obtained prior to each draw payment.
      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 detail as Construction- Conversion/Construction-to-Permanent
      and select the Single-Closing radio button. If the applicant is currently renting, the rent payment may be
      excluded from the total debt ratio if the lender obtains documentation verifying the applicant will no longer
      be liable for rent payments under the lease agreement once the financed single-close construction home is
      completed. If the applicant is currently renting and will remain liable for rent payments under the lease
      agreement even after the single-close construction home is completed, the rent payment must be included in
      the total debt ratio. If the applicant’s current principal residence is pending sale, but the transaction
      will not be complete prior to the commencement of the applicant’s new SFHGLP construction loan, the existing
      PITI payment and the proposed PITI payment must be used in qualifying the applicant for the new guaranteed
      mortgage loan. The lender may exclude the existing PITI payment under the following conditions: x The new
      loan is a SFHGLP single close construction loan; x The lender can document an executed sales contract for
      the current residence; and x The lender can confirm that any financing contingencies have been cleared. The
      permanent mortgage loan interest rate, which is used for underwriting, is established at closing. The Loan
      Note Guarantee may be issued once the interim construction loan is closed without waiting for completion of
      the subject property. An optional checklist, Attachment 12-C of this Chapter, has been developed to assist
      lenders with their project review.'
    drafter_attestation: Verbatim from HB-1-3555 §12.12 body (max-gap occurrence), snapshot 0466acd1ea2d17a4; substring-verified.
  judgment: false
