USDA Technical Handbook HB-1-3555 §12.9 — Existing And New Dwellings
USDA HB-1-3555 §12.9 (Existing And New Dwellings). Gap-fill (verbatim).
Verbatim regulatory text
Verbatim provisions from USDA Technical Handbook HB-1-3555 §12.9 — Existing And New Dwellings — 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 12.9 — Existing And New Dwellings
ISTING AND NEW DWELLINGS A. Existing Dwellings [7 CFR 3555.202(b)] The objective of the SFHGLP is to assist eligible rural households in obtaining an adequate, safe, and sanitary single-family home. Information regarding financing existing manufactured and modular homes may be found in Chapter 13 of this Handbook. An existing dwelling may be attached, detached, or semi-detached dwellings and must be inspected to determine the dwelling meets the current minimum property requirements of the Single Family Housing Policy Handbook (SF Handbook; HUD Handbook 4000.1, also known as HUD Handbook) or as superseded by HUD. An existing dwelling is defined as been completed for more than 12 months or has been completed less than 12 months but has been previously occupied.
USDA HB-1-3555 12.9 — Existing And New Dwellings
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. Qualified appraisers are licensed or certified and can attest the property meets HUD Handbook 4000.1 standards. It remains the lenders responsibility to determine if the appraiser is thoroughly familiar with the HUD Handbook. The appraiser may certify the requirements of the HUD Handbook 4000.1 have been met on page three of the appraisal form in the “comment” section, or in an addendum to the appraisal. Appraisers who are unfamiliar with the HUD Handbook standards should not certify that a property meets those standards and doing so constitutes a misrepresentation. If the qualified appraiser is unfamiliar with the HUD Handbook standards, the lender should obtain a home inspection report provided by a home inspector deemed qualified by the lender. The appraiser must report all readily observable property deficiencies, as well as any adverse conditions discovered performing the research involved in completing the appraisal. Required repairs under the noted handbooks are limited to those repairs necessary to preserve the continued marketability of the property and to protect the health and safety of the occupants. A property in which a qualified appraiser indicates is in average or good condition may be considered in good repair, though repairs may still be required by the lender. Lenders are responsible for ensuring the following guidelines are met: x Lenders must encourage applicants to obtain a detailed home inspection of the property independent of the inspection noted above. x All repair items required by the appraiser or underwriter must be inspected and the clearance documented and retained in the lender’s permanent loan file. As stated in the HUD Handbook, the responsibility for enforcing code rests with the local municipalities. x Termite/pest inspections are required if the lender, appraiser, inspector, or State law requires the inspection to confirm the property is free of active infestation. x Lenders are not required to collect an inspection report to confirm thermal standards for existing dwellings. x Lenders must provide applicants with Form HUD-92564-CN, For Your Protection: Get a Home Inspection, with evidence maintained in the lender’s permanent loan file.
USDA HB-1-3555 12.9 — Existing And New Dwellings
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. Lenders are responsible to determine if any repairs will be required to meet HUD Handbook standards. Lenders are reminded they are responsible for the acts of their agents, including appraisers. When lending to low- and moderate-income borrowers under the SFHGLP, lenders are expected to use professional judgment and rely upon prudent underwriting practices in determining when a property condition requires additional inspections or repairs. Conditions that would warrant additional repairs include those that pose a threat to the safety of the occupants, jeopardize the soundness and structural integrity of the property, or adversely affect the likelihood of a low- or moderate-income borrower from becoming a successful homeowner. HUD Handbooks and forms are located at: https://hud.gov/program_offices/administration/handbks_forms B. New Dwellings [7 CFR 3555.202(a)] New dwellings must be designed and constructed in accordance with certified plans and specifications. Evidence of all of the items below must be retained in the lender’s permanent loan file: x Certified plans and specifications; x Required construction inspections; and x Thermal standards are met. Certifications may be accepted from individuals or organizations trained and experienced in the compliance, interpretation, or enforcement of the applicable development standards for drawings and specifications. One year builder warranties are deemed acceptable to the Agency when the policy is non-refundable or cancellable, the policy is from an insurance company licensed to do business in the state where the property is located, and the coverage includes (from effective date) at least one year for any defects caused by faulty workmanship or defective materials. The one year builder’s warranty must be fully executed and include the date of warranty, owner, warrantor name, location of property, signatures of all parties, and any other applicable information. This section will provide documentation options necessary to meet each of these
USDA HB-1-3555 12.9 — Existing And New Dwellings
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. requirements for both stick built and manufactured homes. Information regarding financing new manufactured and modular homes may be found in Chapter 13 of this Handbook.
USDA HB-1-3555 12.9 — Existing And New Dwellings
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. 1. Documentation Requirements for New Construction Stick Built Homes: Evidence of Certified Plans and Specs Evidence of Construction Inspections Evidence of Thermal Standards OPTION 1 Copy of the certification from a qualified individual or organization that the reviewed documents comply with applicable development standards; OR OPTION 1 Certificate of Occupancy issued by a local jurisdiction showing that it has performed at least 3 construction phase inspections, as identified in Section 12.9(B), and an acceptable 1 year builder warranty; OR OPTION 1 A qualified, registered architect or a qualified, registered engineer may certify confirmation with IECC standards; OR OPTION 2 Certificate of Occupancy issued by a local jurisdiction; OR OPTION 2 Three construction phase inspections performed at each of the phases identified in Section 12.9(B) and an acceptable 1 year builder warranty; OR OPTION 2 Builder may certify confirmation with the IECC standards; OR OPTION 3 Building Permit (or equivalent) issued by local jurisdiction. OPTION 3 Final inspection and a 10-year insured builder warranty. Builder backed 2/10 warranty fulfills the 10-year warranty requirement. OPTION 3 The final inspection or Certificate of Occupancy issued by a local jurisdiction. The lender is responsible for obtaining one form of required evidence from the list of available source options in each category. This evidence must be kept in the lender's permanent loan file. New Construction Certified Plans and Specifications for Stick Built Homes The lender’s file must contain evidence the plans and specifications comply with all development standards* applicable to the new construction. Acceptable evidence includes:
USDA HB-1-3555 12.9 — Existing And New Dwellings
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. 1. Copy of the certification from a qualified individual or organization that the reviewed documents comply with applicable development standards. Form RD 1924-25 is an acceptable format but is not required by the Agency for guaranteed loans. -OR- 2. Certificate of Occupancy issued by a local jurisdiction. -OR- 3. Building Permit (or equivalent) issued by local jurisdiction. The lender may accept certifications from individuals or organizations trained and experienced in the compliance, interpretation, or enforcement of the applicable development standards* for drawings and specifications. Plan certifiers may be any of the following: x Licensed architects; x Professional engineers; x Plan reviewers certified by a national model code organization; x Local building officials authorized to review and approve building plans and specifications; or x National codes organizations. *Applicable development standards. The current International Code Council (ICC) standards or current state adopted ICC code(s) for residential construction. Evidence of Construction Inspections for Stick Built Homes The lender’s file must contain copies of the documents described in one of the following three options: 1. Certificate of Occupancy issued by a local jurisdiction showing that it has performed at least 3 construction phase inspections, including inspections noted in option 2 below, and a 1-year builder warranty plan acceptable to Rural Development.
USDA HB-1-3555 12.9 — Existing And New Dwellings
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. -OR- 2. Three construction inspections performed when: x Footings and foundation are ready to be poured and prior to back-filling; x Shell is complete, but plumbing, electrical, and mechanical work is still exposed; x Final inspection of completed work prior to occupancy; and x A 1-year builder warranty plan acceptable to Rural Development. Builders may utilize their own warranty form, HUD-92544, or Form RD 1924-19. Applicants who build their own homes cannot provide a self-warranty. -OR- 3. Final inspection and a 10-year insured builder warranty. x Final Update and/or Completion Report (Fannie Mae Form 1004D/Freddie Mac Form 442) is acceptable as a final inspection, provided the appraiser is deemed qualified by the lender. x Builder backed 2/10 warranty fulfills the 10-year warranty requirement. Evidence of Thermal Standards for New Construction Stick Built Homes The lender’s file must contain evidence thermal standards meet or exceed the International Energy Conservation Code (IECC) in effect at the time of construction. Evidence of thermal standards are typically included in the plans and specs to which the dwelling is built. Documentation of conformance may be met by one of the following options: 1. A qualified, registered architect or a qualified, registered engineer may certify confirmation with IECC standards; or 2. The builder may certify confirmation with the IECC standards; or 3. The final inspection or Certificate of Occupancy issued by a local jurisdiction meets this requirement.
USDA HB-1-3555 12.9 — Existing And New Dwellings
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. 2. Documentation Requirements for New Construction Manufactured Homes: Evidence of Certified Plans and Specs Evidence of Construction Inspections Evidence of Thermal Standards OPTION 1 Copy of the certification from a qualified individual or organization that the reviewed documents comply with applicable development standards; OR OPTION 1 Certificate of Occupancy issued by a local jurisdiction showing that it has performed at least the footing and final inspections, as identified in Section 12.9(B), and an acceptable 1 year builder warranty; OR OPTION 1 HUD Data Plate confirmation with IECC standards; OR OPTION 2 Certificate of Occupancy issued by a local jurisdiction; OR OPTION 2 Footing and final inspections performed by a qualified inspector as identified in Section 12.9(B), and an acceptable 1 year builder warranty; OR OPTION 2 Builder may certify confirmation with the IECC standards; OR OPTION 3 Building Permit (or equivalent) issued by local jurisdiction. OPTION 3 Final inspection and a 10-year insured builder warranty. Builder backed 2/10 warranty fulfills the 10-year warranty requirement. OPTION 3 The final inspection or Certificate of Occupancy issued by a local jurisdiction. The lender is responsible for obtaining one form of required evidence from the list of available source options in each category. This evidence must be kept in the lender's permanent loan file. Warranty documents for manufactured homes must include the serial number. New Construction Certified Plans and Specifications for Manufactured Homes The lender’s file must contain evidence the plans and specifications comply with all
USDA HB-1-3555 12.9 — Existing And New Dwellings
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. development standards* applicable to the new construction. Acceptable evidence includes: 1. Copy of the certification from a qualified individual or organization that the reviewed documents comply with applicable development standards. Form RD 1924-25 is an acceptable format but is not required by the Agency for guaranteed loans. -OR- 2. Certificate of Occupancy issued by a local jurisdiction. -OR- 3. Building Permit (or equivalent) issued by local jurisdiction. The lender may accept certifications from individuals or organizations trained and experienced in the compliance, interpretation, or enforcement of the applicable development standards* for drawings and specifications. Plan certifiers may be any of the following: 1. Licensed architects; 2. Professional engineers; 3. Plan reviewers certified by a national model code organization; 4. Local building officials authorized to review and approve building plans and specifications; or 5. National codes organizations. *Applicable development standards. The current International Code Council (ICC) standards or current state adopted ICC code(s) for residential construction. Evidence of Construction Inspections for Manufactured Homes The lender’s file must contain copies of the documents described in one of the following three options: 1. Certificate of Occupancy issued by a local jurisdiction showing that it has performed at least 2 construction phase inspections, which must include the inspections noted in option 2 below, and a 1-year builder warranty plan
USDA HB-1-3555 12.9 — Existing And New Dwellings
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. acceptable to Rural Development. -OR- 2. Two construction inspections performed when: x Footings and foundation are ready to be poured and prior to back-filling; x Final inspection of completed work prior to occupancy; and x A 1-year builder warranty plan acceptable to Rural Development. Builders may utilize their own warranty form, HUD-92544, or Form RD 1924-19. Applicants who build their own homes cannot provide a self-warranty. -OR- 3. Final inspection and a 10-year insured builder warranty. x Final Update and/or Completion Report (Fannie Mae Form 1004D/Freddie Mac Form 442) is acceptable as a final inspection, provided the appraiser is deemed qualified by the lender. x Builder backed 2/10 warranty fulfills the 10-year warranty requirement. Evidence of Thermal Standards for New Construction Manufactured Homes The lender’s file must contain evidence thermal standards meet or exceed the International Energy Conservation Code (IECC) in effect at the time of construction. Evidence of thermal standards are typically included in the plans and specs to which the dwelling is built. Documentation of conformance may be met by one of the following options: 1. A HUD Data Plate confirmation with IECC standards; or 2. The builder may certify confirmation with the IECC standards; or 3. The final inspection or Certificate of Occupancy issued by a local jurisdiction meets this requirement. In general, the lender has primary responsibility for all loan origination activities. The Agency has primary responsibility to review lenders’ actions and monitor participants’