source:
  type: guide
  id: usda-hb-3555-16.2
  authority: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶16.2 —
    Closing The Loan
  description: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶16.2
    — Closing The Loan.
  coverage_tier: operative
obligations:
- id: usda-hb-3555-16.2-full
  canonical_id: usda-hb-3555-16.2-full
  section: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶16.2 — Closing
    The Loan
  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 ¶16.2
      — Closing The Loan
    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: '16.2 CLOSING THE LOAN Required Closing Timeframe: x Purchase
      and refinance transactions - the lender has 90 days from the issuance of the
      Conditional Commitment to close the loan, with an opportunity for one 90- day
      extension. The extension must be requested prior to the expiration of the Conditional
      Commitment. x Construction transactions - the expiration date for new construction,
      other than the “combination construction to permanent loan” option outlined
      in Chapter 12, should correspond with the estimated project completion date,
      but cannot exceed 12-months. x Requests for extensions must be approved by the
      Agency in writing. Upon approval, a new Conditional Commitment will be issued
      reflecting the new expiration date. The Guaranteed Loan System (GLS) application
      page will be updated with the commitment extension. Closing in Compliance with
      Conditional Commitment Approval: x The loan must close under the same, or more
      favorable, terms as underwritten and approved on the Conditional Commitment.
      Any changes in the loan terms, characteristics of the applicant, or characteristics
      of the property between the issuance of Conditional Commitment and loan closing
      requires the lender to notify the Agency in writing. HB 1-3555 (03-09-16) SPECIAL
      PN 16-2 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. x Adverse changes
      may require the release of the application submitted in the Guaranteed Underwriting
      System (GUS) to the lender for correction and resubmission to ensure there is
      no impact to the underwriting recommendation. Refer to Chapter 5 for guidance
      on file submission. x The Agency must verify in writing, prior to loan closing,
      that the changes are acceptable. Failure by the lender to obtain approval from
      the Agency may result in denial of the request for Form RD 3555-17 or Form RD
      3555-17E, Loan Note Guarantee. Signatures: x All individuals applying for the
      loan and assuming responsibility for the mortgage debt must sign the Uniform
      Residential Loan Application and any addenda. x Standard industry closing documents
      are utilized when closing the loan. The lender is required to ensure a valid
      and enforceable first lien on the property is obtained. Any individual whose
      signature is required by state law must sign the security instruments and/or
      note to create a valid first lien, to pass clear title, or to waive inchoate
      rights. All owners to be vested in title must sign the security instruments,
      except as noted in this section. x Lenders should not encourage borrowers to
      sign blank or incomplete documents. A Power of Attorney (POA) may be used when
      the mortgagee verifies and documents that the following applicable requirements
      have been satisfied: x Any specific or general POA must comply with state law
      and allow for legal enforcement of the mortgage note. x For military personnel,
      a POA may only be used for one of the applications (initial or final), but not
      both: o when the service member is on overseas duty or on an unaccompanied tour;
      o when the mortgagee is unable to obtain the absent borrower’s signature on
      the application by mail or via fax; and HB 1-3555 (03-09-16) SPECIAL PN 16-3
      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. o where the attorney-in-fact
      has specific authority to encumber the property and to obligate the borrower.
      Acceptable evidence includes a durable POA specifically designed to survive
      incapacity and avoid the need for court proceedings. x For incapacitated borrowers,
      a POA may only be used where: o a borrower is incapacitated and unable to sign
      the mortgage application; o the incapacitated individual will occupy the property
      to be guaranteed; and o the attorney-in-fact has specific authority to encumber
      the property and to obligate the borrower. Acceptable evidence includes a durable
      POA specifically designed to survive incapacity and avoid the need for court
      proceedings. Electronic signatures in accordance with the conditions outlined
      in Chapter 15 of this Handbook may be accepted. Title Evidence. The lender will
      ensure that the mortgage must have a valid first lien position at closing and
      is covered by either a title insurance policy issued by an acceptable insurer
      (including any required endorsements) or an attorney’s title opinion letter
      issued by an attorney experienced in the examination of titles in the jurisdiction
      where the subject property is located. When using attorney title opinion letters,
      the lender will retain the documentation the attorney used in making its determination
      on the title coverage in their permanent case loan file. Additional guidance
      for acceptable lien position requirements can be found in this Chapter. The
      lender should be aware of any additional investor criteria/overlays beyond the
      SFHGLP requirements regarding the use of attorney opinion letters. HB 1-3555
      (03-09-16) SPECIAL PN 16-4 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.
      Below are the requirements for the use of each title evidence type: Title Insurance
      Attorney Title Opinion The guaranteed loan must be in first lien position when
      recorded. The guaranteed loan must be in first lien position when recorded.
      The title policy must list all other liens and state that they are subordinate
      to the guaranteed loan. The attorney opinion letter must list all other liens
      and state that they are subordinate to the guaranteed loan. The amount of title
      insurance coverage must at least equal the original principal amount of the
      loan. The attorney opinion letter must include language relating to the amount
      of coverage that must at least equal the original principal amount of the loan.
      The title policy must provide evidence of good and marketable title. If there
      are exceptions discovered during the title search, the lender is responsible
      for reviewing and determining if those title exceptions affect the property’s
      value or marketability. The attorney opinion letter must be prepared and signed
      by an attorney licensed to practice law in the jurisdiction where the subject
      property is located and experienced in examination of titles for all property
      types. If there are any exceptions discovered, the lender is responsible for
      reviewing and determining if those exceptions affect the property’s value and
      marketability. The following property types are ineligible for an attorney title
      opinion letter: x Manufactured Homes x Leasehold Estates (Native American restricted
      land and Community Land Trust) Interest Credit Closing. To reduce the burden
      on borrowers whose loans were scheduled to close at the end of the month, but
      did not due to unforeseen circumstances, lenders and borrowers may agree to
      credit the per diem interest to the borrower and have the mortgage payments
      begin the first of the succeeding month. Lender Certification. The lender will
      certify that the loan has been underwritten and closed in accordance with 7
      CFR 3555.107, that it meets all conditions set forth in the Conditional Commitment,
      and that all documentation has been submitted to Rural Development. The lender
      acknowledges that upon receipt and acceptance of the HB 1-3555 (03-09-16) SPECIAL
      PN 16-5 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. conditions of the
      Conditional Commitment and the required fees in the appropriate amount, Rural
      Development will execute and issue the Loan Note Guarantee.'
  judgment: false
