source:
  type: guide
  id: usda-hb-3555-1.11
  authority: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶1.11 —
    Unauthorized Assistance
  description: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶1.11
    — Unauthorized Assistance.
  coverage_tier: operative
obligations:
- id: usda-hb-3555-1.11-full
  canonical_id: usda-hb-3555-1.11-full
  section: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶1.11 — Unauthorized
    Assistance
  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 ¶1.11
      — Unauthorized Assistance
    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: '1.11 UNAUTHORIZED ASSISTANCE Unauthorized assistance occurs
      when a borrower is not eligible for all or part of the financial assistance
      received in the form of a loan guarantee. Loans made to unqualified borrowers
      or made for an ineligible purpose are considered unauthorized assistance. The
      form of unauthorized assistance can differ based upon false information or inaccurate
      information. Unauthorized assistance may be identified through audits, reviews
      by the Agency or its agents, or as reported by lenders. Chapter 16, Attachment
      16-B provides guidance for submitting lender self-reports. The significance
      of the unauthorized assistance will determine the Agency’s response in accordance
      with Section 3555.257 of 7 CFR Part 3555. When the Agency becomes aware of unauthorized
      assistance due to false information provided by the applicant, the lender may
      be required to accelerate the loan request. HB-1-3555 (03-09-16) SPECIAL PN
      1-10 Revised (06-24-22) PN 563 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. Failure of the
      lender to accelerate the loan may result in reduction of a loss claim and/or
      voiding the guarantee. Based upon the severity, the Agency may pursue criminal
      and civil false claim actions, suspension and/or debarment, or other appropriate
      actions. The Agency will document the findings surrounding the unauthorized
      assistance in detail and provide a solution on disposition of the case. 1.12
      AGENCY LOAN APPROVAL AUTHORITY GUIDELINES FOR THE SFHGLP All new loan specialists
      working in the SFHGLP are expected to receive loan approval authority prior
      to officially issuing decisions on program applications. The process consists
      of initial training, proficiency-based tests, mentoring support, file reviews,
      and a formal recommendation by the new specialist’s supervisor. The guidelines
      detail the expectations to be followed by Agency employees delivering the SFHGLP.
      A. Training x New specialists will complete all approved Single Family Housing
      (SFH) University guaranteed training modules in the order required by the SFH
      University curriculum. x The SFH University curriculum will be supplemented
      with on-the-job training, provided by an experienced loan specialist/mentor.
      B. Proficiency Testing x The proficiency-based tests are a key component of
      the loan approval authority process. All new specialists are required to pass
      the test after each training module is completed. This will indicate to the
      supervisor and mentor that the new specialist has an acceptable level of knowledge
      in that program area and can proceed to the next training module. The proficiency-based
      tests and scoring system are administered in accordance with the SFH University
      curriculum requirements. x After the final module is completed, the supervisor
      shall schedule a time for the specialist to take the final exam, which consists
      of questions generated from information presented in all the completed modules
      and will be used to assess the overall level of knowledge of the specialist.
      x The minimum passing score for the proficiency test is 70. If a new specialist
      fails the first attempt, the first line supervisor will review the results of
      the test with the HB-1-3555 (03-09-16) SPECIAL PN 1-11 Revised (06-24-22) PN
      563 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. specialist, address weaknesses, advise the new
      specialist on the area(s) they need to focus, provide a solution to rectify
      the deficiencies, and allow the specialist to retake the test when the supervisor
      determines the specialist’s readiness. C. Mentoring x At the time of enrollment
      in SFH University, the supervisor will assign a mentor to assist the new specialist
      in learning the requirements associated with the underwriting and review of
      SFHGLP applications. x The assigned mentor shall prepare written quarterly reports
      to the new specialist’s supervisor, outlining the progress and recommendations
      on areas needed for continued development. x Mentoring is expected to last at
      least 12 months, but may be extended (in six- month increments) in the event
      the progress the specialist is making is not up to par with his/her SFH University
      curriculum and the proficiency-based tests. x The assigned mentor shall not
      be the new specialist’s supervisor. The mentor’s role is to help facilitate
      continued learning and to serve as a resource for technical questions and procedural
      guidance. D. File Review x After a new specialist attains a passing score on
      the final test, the supervisor or mentor will assign SFHGLP files to the new
      specialist to review independently. Prior to obligation, the supervisor or mentor
      will complete a file review of each application to evaluate and attest that
      the new specialist is working at a standard worthy of independent loan approval
      authority. x Once an acceptable level of review has been attained, the first
      line supervisor will submit a minimum of four (4) GUS ACCEPT and six (6) GUS
      REFER or REFER WITH CAUTION loan files for review by a Director of the OPD,
      or assignee, in order to determine the loan approval authority recommendation.
      E. Supervisor Recommendation for Approval x Upon successful completion of the
      SFH University curriculum, proficiency tests, final exam, mentoring period,
      and file reviews, a letter will be prepared by the new specialist’s supervisor
      to a Director of the OPD recommending the delegation of loan approval authority.
      HB-1-3555 (03-09-16) SPECIAL PN 1-12 Revised (06-24-22) PN 563 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 Director of the OPD, or assignee, will review the recommendation
      and any supporting documentation to grant or deny the delegation of loan approval
      authority to the new specialist. The designation will be documented in writing.
      If approval is granted, a certificate will be awarded to the specialist noting
      his/her approval status with USDA Rural Development. Attachment 1-C, Delegation
      of Loan Approval Authority, may be used. x The expected amount of time to complete
      this process may vary between 12 and 18 months. If more than 24 months have
      elapsed, a Director of the OPD, or assignee, will examine the reason(s) for
      the delay and will develop a plan of action. x In the event the supervisor is
      unable to recommend loan approval authority within 24 months due to recurring
      deficiencies in the specialist’s file reviews, a revised training plan will
      be developed by the supervisor to assist the new specialist in overcoming and
      resolving the identified deficiencies. F. Continued Training Process Supervisors
      should continue to evaluate the quality of loan reviews by new specialists after
      loan approval authority has been granted. Close monitoring by an established
      quality assurance process is recommended to determine if specific training might
      be required based on unusual application submissions. G. Reinstatement of Approval
      Authority If a specialist’s loan approval authority is revoked, RD Instruction
      1901-A authorizes the Administrator to provide written restrictions or revocations
      of the authority given to any loan approval official. The Administrator may
      take action upon the recommendation of a Director of the OPD, or assignee. Supervisors
      are granted the authority to determine what actions, training, and conditions
      are required to reinstate loan approval authority to a specialist. HB-1-3555
      (03-09-16) SPECIAL PN 1-13 Revised (06-24-22) PN 563 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 1-A NOTICE OF RELATIONSHIP/ASSOCIATION BETWEEN SFHGLP APPLICANT AND
      RURAL DEVELOPMENT EMPLOYEE TO: Origination And Processing Division SUBJECT:
      Notice of relationship or association between applicant and Rural Development
      employee This is to notify you that the following applicant is requesting a
      Single Family Housing Guaranteed loan and is related or is associated with a
      Rural Development employee: Applicant Name: _______________________________________________
      Borrower Id Number: ____________________________________________ Property Address:
      _______________________________________________ _______________________________________________
      County Name: ________________________________ Status Of Application: _____Pre-Eligibility
      _____Ready To Submit _____In Process Rural Development Employee Name: _________________________________
      Duty Station: _____________________________________________________ Details
      of relationship/association: _______________________________________ ___________________________________________________________________
      ___________________________________________________________________ Submitted
      By: _____________________________ Date: ____________ Employee Or Lender Title/Organization
      Email: _______________________________ HB-1-3555 (03-09-16) SPECIAL PN 1-14
      Revised (06-24-22) PN 563 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 1-B REQUIREMENTS
      FOR HANDLING SFHGLP APPLICATION OF EMPLOYEE, RELATIVE OR ASSOCIATE TO: (Lender
      Name) SUBJECT: Requirements for handling SFHGLP applications of employee, relative
      or associate for (Applicant Name, Borrower ID Number) The following application
      processing procedures have been established by a Director of the Origination
      and Processing Division: Review Of Application, Approval And Issuance Of Conditional
      Commitment: _________________________________ Review Of Closing Documents, Issuance
      Of Loan Note Guarantee: _____________________________________ Post Closing Review:
      ____________________________________ Access to the applicant’s electronic case
      file in the Agency’s automated systems will be restricted to the aforementioned
      employees. All servicing actions will be in accordance with 7 CFR 3555. [Date]
      ________________________________ [Name] Director, Origination And Processing
      Branch cc: [Employee First-Line Supervisor] Employee eOPF HB-1-3555 (03-09-16)
      SPECIAL PN 1-15 Revised (06-24-22) PN 563 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
      1-C DELEGATION OF LOAN APPROVAL AUTHORITY TO: [Name] [Title] USDA Rural Development
      [Location] By my authority as Director of Origination and Processing Division
      for USDA Rural Development, in accordance with Rural Development Instruction
      1901-A, I hereby make a delegation to the aforementioned employee: x Loan approval
      authority for Single Family Housing Section 502 Guaranteed Loans described in
      7 CFR Part 3555. This delegation is effective immediately and will continue
      until the delegate leaves his/her position or until revocation or other change
      is made in writing. [Date] __________________________ [Name] Director, Origination
      and Processing Division cc: [first-line supervisor] eOPF HB-1-3555 (03-09-16)
      SPECIAL PN 2-1 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
      2: RECORD RETENTION 7 CFR 3555.51'
  judgment: false
