source:
  type: guide
  id: usda-hb-3555-18.7
  authority: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶18.7 —
    Property Management Methods And Activities
  description: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶18.7
    — Property Management Methods And Activities.
  coverage_tier: operative
obligations:
- id: usda-hb-3555-18.7-full
  canonical_id: usda-hb-3555-18.7-full
  section: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶18.7 — Property
    Management Methods And Activities
  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 ¶18.7
      — Property Management Methods And Activities
    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: '18.7 PROPERTY MANAGEMENT METHODS AND ACTIVITIES [7 CFR 3555.306
      (e)] The servicer and Agency share a common interest to ensure that properties
      are managed and maintained. The Maximum Property Preservation Allowances outlines
      the HB-1-3555 (03-09-16) SPECIAL PN 18-7 Revised (04-14-25) PN 637 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. maximum allowable costs for property preservation and maintenance and
      can be located on the USDA Training and Resource Library in the Loan Servicing
      section under Loss Mitigation found at https://www.rd.usda.gov/resources/usda-linc-training-resource-
      library/loan-servicing. Costs higher than the published amounts for maintenance
      and preservation may be appropriate in some extenuating circumstances such as
      very rural areas, extreme neglect, or large amounts of debris. Justification
      for the higher cost must be documented with color photos and detailed invoices
      and will be reviewed at the time of the loss claim. A. Vacant or Abandoned Properties
      The servicer may need to take custody of the security property when it has been
      determined the property is vacant or has been abandoned. The servicer must inspect
      the property within 30 days of this determination to confirm occupancy and document
      its condition. When the inspection reveals the property is vacant, the servicer
      should attempt to locate the borrower to determine the reason for the vacancy
      and take immediate action to protect the property from vandalism and the elements
      in accordance with local laws. Preservation and protection requirements for
      custodial property are as follows: x Perform monthly interior and exterior inspections
      to document the general condition of the property and any actions required to
      adequately protect and preserve the property. The servicer will maintain adequate
      documentation to support servicing decisions. x Take necessary actions to prevent
      unauthorized entry unless otherwise prohibited by state law. x Secure windows
      and doors. Boarding the property should be avoided unless it is necessary to
      avert vandalism to the property. The servicer may post a notice with contact
      information, however, should not post large signs or take other actions that
      might call attention to the vacant property. x Determine if any emergency repairs
      are necessary to adequately preserve and protect the property. Emergency repairs
      will be completed by the servicer as quickly as possible to avoid property deterioration
      and does not require prior Agency approval. Servicers will retain documentation
      of all repairs, including photos of before and after work, for submission with
      any loss claim. HB-1-3555 (03-09-16) SPECIAL PN 18-8 Revised (04-14-25) PN 637
      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 File a claim under the borrower’s insurance
      policy for insurable damage. x Protect plumbing and other operating systems
      from freeze damage. x Remove any interior or exterior debris that poses a health,
      environmental, fire, or safety hazard. Examples include, but are not limited
      to, highly flammable chemicals, decaying food, dead animals, broken glass or
      other sharp objects, and large quantities of paint or paint products. x Mow
      lawns, maintain shrubs, and perform snow removal. x Maintain receipts and invoices
      for all costs incurred for preservation and protection of custodial properties.
      Services associated with preservation and protection of properties must be typical
      and reasonable. x Notify the insurance carrier regarding the vacancy to ensure
      appropriate coverage is maintained. A mortgage may be current or delinquent
      when a servicer becomes aware a borrower may have abandoned the security property.
      If the borrower redeems a property, the redemption amount should include all
      advances including emergency repairs. When an inspection reveals that the property
      is vacant or abandoned on a delinquent loan and liquidation is not already in
      process, taking custodial possession should immediately initiate the foreclosure
      process. 18.8 ENVIRONMENTAL HAZARDS [7 CFR 3555.306(e)] If environmental issues
      impact the property’s value at the time of liquidation, the servicer must document
      when and how the hazard developed. If the environmental hazard was caused by
      activities that took place after the loan guarantee was issued, or by factors
      that could not reasonably have been detected with appropriate due diligence,
      the Agency will allow for costs from any resulting loss in the loss claim calculation.
      If it appears that it would be cost effective to determine the lien valueless
      because of an environmental hazard, the servicer should submit documentation
      to support this request to the Agency for concurrence via email to guarantee.svc@usda.gov.
      HB-1-3555 (03-09-16) SPECIAL PN 18-9 Revised (04-14-25) PN 637 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. SECTION 4: ACCELERATION AND FORECLOSURE [7 CFR 3555.306]'
  judgment: false
