PROCEDURE NOTICE

RD MANUAL CHANGES

INSERT RD INS 440.1 INTEREST RATES, AMORTIZATION, GUARANTEE FEE, ANNUAL CHARGE, AND FIXED PERIOD. This Instruction is partially revised as follows:

Exhibit B: To update the Treasury Judgement rate and the effective date of August 1, 2025.

RD HANDBOOK CHANGES

INSERT RD HB-1-3550 DIRECT SINGLE FAMILY HOUSING LOANS AND GRANTS - FIELD OFFICE HANDBOOK. This Handbook is partially revised. The specific revisions are outlined below.

Appendix 4: Appendix 4 is revised to include the August 1, 2025, interest rate for the Above Moderate Single Family Housing non-program loans.

INSERT RD HB-1-3555 SFH GUARANTEED LOAN PROGRAM TECHNICAL HANDBOOK.

Chapter 4: The following updates were made to HB-1-3555, Chapter 4 to clarify that only employees with a direct impact on the mortgage transaction are prohibited from having multiple sources of income. Additionally, minor grammatical and formatting edits were made to be consistent with other handbook chapter revisions.

Paragraph 4.2 – Operate Responsibly

• Updated to clarify that individuals that have a direct impact on the mortgage transaction (i.e. underwriters, appraisers, inspectors, engineers, etc.) are prohibited from having multiple roles or multiple sources of income, either directly or indirectly, in a single Rural Development transaction.

RD HANDBOOK CHANGES (Con.)

INSERT RD HB-1-3555

Chapter 5: The following updates were made to HB-1-3555, Chapter 5 to update lenders requirements for applications with a non-purchasing spouse (NPS) in a Community Property State (CPS), indicate loan types that are not supported by the Guaranteed Underwriting System (GUS) must utilize GUS for document uploads, clarify alternatives to the use of assets, and make update to GUS access requirements using Login.gov. Additionally, minor grammatical and formatting edits have been made.

Paragraph 5.2 – Requesting a Guarantee

• Removed reference to Appendix 5 from the current income limits section.

Paragraph 5.3 – Utilizing the Guaranteed Underwriting System

• Clarified Approved Lenders must utilize GUS for all files that are supported by GUS as part of the credit risk evaluation.
• Updated the system requirement that must be used when obtaining access to GUS.
• Clarified that Lenders must obtain GUS access when using a Login.gov account instead of authentication.
• Updated to inform the user that existing GUS applications can be updated via file import, even after the initial import is executed to create the application and further refer user to the GUS Lender User Guide for detailed information.
• Clarified how assets may be entered in GUS.
• Clarified that loans unsupported by GUS must be manually submitted and underwritten; however, the documents must be uploaded into GUS.
• Deleted reference to additional document submission requirements for properties in Community Property States.

Chapter 8: The following updates were made to HB-1-3555, Chapter 8, to incorporate revisions to Form RD 3555-21 and the requirement of manual files to be submitted through GUS.

Paragraph 8.2 E - Not Having a Suspension or Debarment

• Specified upon submission of the application the lender will ensure a SAM check was performed by documenting the date in GUS.
• Further explain on a manual file submission, those files not supported by GUS, that the lender must follow the Manual File Submission process detailed in Step #3, “E-mail the Appropriate Production Team”.

Chapter 9: The following updates were made to HB-1-3555, Chapter 9, to incorporate program updates which allow greater flexibility for lenders reviewing number of adult household members, third-party verifications, borrowers with previous employment, housing allowance requirements for annual income, LLCs, tax transcripts, and IRS Form 8821, as well as making minor grammatical and formatting edits.

Paragraph 9.3 B – Calculation of Annual Income

• Clarified that taxable income for housing allowances should be added to annual income.

RD HANDBOOK CHANGES (Con.)

INSERT RD HB-1-3555

Paragraph 9.3 E – Verification Requirements

• Added guidance for verification documentation on previous employment.

Paragraph 9.3 (E) (4) IRS Transcripts: Verification of Income

• Added IRS Form 8821 as an alternative to the 4506 for the IRS transcript requirement.
• Removed verbiage to clarify that tax transcripts can be added to the lender’s permanent file after closing.

Attachment 9-A page 23-Documentation Source Option

• Clarified that in order to certify the household number it must be listed in GUS.

Attachment 9-A – Assets and Reserves

• Added direct third-party verification vendor to the options for assets & reserve verification on business, depository, and IDR accounts. All three sections have been updated to be clearer and more concise.
• Clarified that lenders must not exceed the balance from the most recent official monthly bank statement provided for eligible reserves. Lenders may choose to use a lower balance at their discretion.

Attachment 9-E (E)

• Removed verbiage prohibiting single member LLCs in Massachusetts and District of Columbia as they no longer prohibit this.

Chapter 10, Attachment 10-A: Updated to clarify that multiple Verifications of Rent may be combined to make up to the 12-month requirement when no gaps exist between rented units.

• Adds clarifying language throughout for loans that are not supported by GUS.
• Clarifies documentation requirements regarding credit reports for non-purchasing spouses are maintained in the lender’s permanent loan file.
• Adds clarifying language for documentation requirements regarding a previous USDA loss.

Chapter 15: The following updates were made to HB-1-3555, Chapter 15 to update instructions for lenders when submitting applications to Rural Development.

Paragraph 15.3 Loan Application Package

• Updated to show that all documents should be submitted through GUS.

Paragraph 15.5 Agency Review of Application Package

• Removed that staff must determine if applicant is eligible, as a SAVE check is no longer required.

RD HANDBOOK CHANGES (Con.)

INSERT RD HB-1-3555

Chapter 15: Attachment 15-A Loan Origination Checklist

• Updated lender instructions, providing correct links to the Manual Submission Job Aid and GUS user guide.
• Removed references to specific FEMA forms and specific appraisal form numbers, as lenders are responsible for obtaining the most current forms.
• Removed credit report requirement for non-purchasing spouses as this is now required to be retained by the lender.
• Added instruction under Streamlined Assist Refinance to state that there must be a net tangible benefit of $50 and there cannot be an increase in the interest rate.

Chapter 16: The following updates were made to HB-1-3555, Chapter 16 to make minor grammatical and formatting changes, correct discrepancies, and provide clarification for easier understanding of guidance.

Paragraph 16.2 Ownership Requirements

• Added a section titled “Title Evidence,” which describes the requirements of both Title Insurance and Attorney Title Opinion letters.

Attachment 16-B: Updated the email address for submitting a “self-report.”

FORM REPLACEMENT

RD 3555-21 REQUEST FOR SINGLE FAMILY HOUSING LOAN GUARANTEE revised 08-25. Prescribed in HB-1-3555. The Form and FMI are revised to update the non-discrimination statement. The Form and FMI can be located on the eForms website eForms Home (usda.gov).