The U.S. Department of Agriculture (“USDA” or “Agency”) has announced updates to Chapters 5, 13, 15 and Appendix 4 of the Single Family Housing Guaranteed Loan Program Technical Handbook (“HB-1-3555”). The updates became effective on June 28, 2023, as published in Procedural Notice 585.
The notable updates in each Section are indicated below:
Chapter 5 – Origination and Underwriting
- Updates to terminology used to reference non-U.S. citizens in acknowledgment of non-U.S. citizen waiver. If an applicant is not a U.S. citizen, they must produce evidence per Agency guidelines to qualify as a non-U.S. citizen.
- Language for mandatory use of the Guaranteed Underwriting System (“GUS”) when possible and additional guidance on final GUS submission actions.
Chapter 13 – Special Property Types
- New sections added for loans on Native American restricted lands and loans on Hawaiian Home Lands. Native American restricted lands must remain in trust or restricted status and transfers of interest must be approved by the Secretary of the Interior. A definition is added along with loan and recording requirements for Hawaiian Home Lands.
- Expanded definition of manufactured homes. Clarification that manufactured homes must have been built within 12 months of a purchase contract.
Chapter 15 – Submitting the Application Package
- Language added to advise that lenders are not authorized to close loans prior to the issuance of a Conditional Commitment, or else the loan submission will be ineligible for Loan Note Guarantee.
- Instructions added for submitting a manually underwritten loan, including how to upload documents, and how to notify the applicable Production Team for file assignment.
- Updated instruction indicating that lender is responsible for notifying the Agency when missing documentation has been uploaded and is ready for review.
- Requirement added to Loan Origination Checklist for appraisals to be uploaded in color. Also, information added for a Verification of Rent to only be applicable when rental history is indicated.
Appendix 4 – Agency Contact Information
- Title of Appendix A changed to “Agency Contact Information.”
- Single Family Housing Guaranteed Loan Divisions listed with brief descriptions
- Link added to Contact List for additional resources.
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