source:
  type: guide
  id: usda-hb-3555-7.3
  authority: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶7.3 —
    Loan Terms
  description: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶7.3
    — Loan Terms.
  coverage_tier: operative
obligations:
- id: usda-hb-3555-7.3-full
  canonical_id: usda-hb-3555-7.3-full
  section: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶7.3 — Loan
    Terms
  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 ¶7.3
      — Loan Terms
    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: '7.3 LOAN TERMS The lender must consider whether the loan could
      be made without a guarantee. If the lender is willing to make the loan without
      the guarantee at the same rates and terms, the HB-1-3555 (03-09-16) SPECIAL
      PN 7-2 Revised (10-04-19) PN 529 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. loan is not eligible
      for the guarantee program. If the lender is not willing to make the loan without
      a guarantee and wishes to request a guarantee, the required loan terms for all
      loans guaranteed under the program are described below. A. Repayment Period
      The loan term must be 30 years, and the loan must fully amortize in that period.
      The promissory note must show regular monthly payments generally payable on
      the first day of the month. B. Interest Rate The lender and the borrower are
      free to negotiate any mutually acceptable fixed interest rate. The interest
      rate should be locked by the time of loan settlement. In the event the interest
      rate is not locked at the time Form RD 3555-18 is issued, and the interest rate
      increases between the time of issuance of Form RD 3555-18 and loan closing,
      the lender will note the change when submitting the loan closing package and
      support the increase in interest rate with modified loan application documents.
      Modified loan documents will include at a minimum: x Updated URLA reflecting
      data changes due to an interest rate adjustment. x Underwriting analysis reflecting
      the updated interest rate and confirming the applicant(s) remain eligible for
      the SFHGLP. x Interest rates that have been underwritten with the assistance
      of GUS will require a resubmission if the locked interest rate adversely affects
      the eligibility of the loan. The resubmission will be treated as a new request
      by SFHGLP processing offices. An increased interest rate could result in a denial
      of Loan Note Guarantee request if the underwriting recommendation of GUS at
      issuance of Form RD 3555-18 results in a recommendation lower than the original
      recommendation (i.e. an Accept underwriting recommendation at issuance of the
      Form RD 3555-18, changed to Refer underwriting recommendation as a result of
      a resubmission with a higher interest rate). C. Terms Unacceptable For A Guarantee
      The following terms are unacceptable for the guaranteed loan. x Adjustable rate
      mortgages (ARMs); x Balloon mortgages; x Mortgages for other than 30 years;
      HB-1-3555 (03-09-16) SPECIAL PN 7-3 Revised (10-04-19) PN 529 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 Interest on interest or negative amortization (or any non-fully amortizing
      loan); and x Prepayment penalties. HB-1-3555 (03-09-16) SPECIAL PN 8-1 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. CHAPTER 8: APPLICANT CHARACTERISTICS
      7 CFR 3555.151'
  judgment: false
