USDA Technical Handbook HB-1-3555 §12.15 — Eligible Loan Costs
USDA HB-1-3555 §12.15 (Eligible Loan Costs). Gap-fill (verbatim).
Verbatim regulatory text
Verbatim provisions from USDA Technical Handbook HB-1-3555 §12.15 — Eligible Loan Costs — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
USDA HB-1-3555 12.15 — Eligible Loan Costs
IGIBLE LOAN COSTS The loan will be used to finance the construction of a new single-family housing residence, which can include modular and manufactured home construction. Condominiums, including detached condominiums and site condominiums, are ineligible for this type of loan feature. Any item included in the cost to construct the home must be commonly and customarily included in the cost to construct other homes in the area where the subject property is located. A contingency reserve to cover eligible expenses associated with
USDA HB-1-3555 12.15 — Eligible Loan Costs
05-05-25) PN 640 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. unplanned problems with construction or change orders may be utilized. If used, the reserve is limited to 10% of the cost of construction (including labor, materials, and soft costs). Reserve funds must be deposited into the construction reserve account. The cost to construct must not include items such as furniture, electronic and home entertainment equipment, or other personal items. Loan costs which may be included in the loan amount are subject to the maximum loan to value and will be reasonable and customary construction costs such as: Land x Acquisition cost of the land; and x Payoff the balance of land to be utilized in the construction of the dwelling. Construction Hard Costs x Costs inside the contract to be detailed on the construction budget agreed upon by the builder and borrower; and x Costs outside of the contract, paid to subcontractors, for contributive work such as well and septic installation, roads/driveways, utility hookups, landscaping, etc. Construction Soft Costs x Appraisal fees x Inspection fees x Survey x Permit plan review fees x Architecture or design fees x Engineering fees x Title updates
USDA HB-1-3555 12.15 — Eligible Loan Costs
05-05-25) PN 640 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 Lender construction administration fees x Contingency reserve x Interest reserve, including interim interest as accrued during the construction period on a warehouse line of credit up to 12 months x Principal, interest, taxes, and insurance (PITI) payment reserve up to 12 months x Project review fees x Builder acceptance or review fees x Tax and insurance reserve Other reasonable and customary closing costs are allowable as defined in Chapter 6 of this Handbook, as long as the costs do not exceed the maximum loan to value described in Chapter 7.