USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶15.5 — Agency Review Of Application Package

USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶15.5 — Agency Review Of Application Package

15.5 AGENCY REVIEW OF APPLICATION PACKAGE The Agency’s automated system will track the date and time the application package is received. Agency review of the application package is completed in the order it is received. As outlined below, there are circumstances which may require a more thorough review by the Agency. In these situations, the Agency will contact the lender. A. Content of Standard Review In general, the Agency will review applications to determine that all program requirements have been met. The lender has sole responsibility to properly underwrite the loan and ensure program requirements have been met. Agency review of the application does not relieve the lender of these responsibilities. Agency staff must determine if the loan: x Is located in an eligible rural area, x Meets the adjusted annual income limit, x Has appropriate collateral value to support the loan request, x Meets environmental requirements of RD Instruction 1970, and x Meets applicable requirements of 7 CFR 3555 and this Handbook. Agency staff will utilize the SFHGLP Documentation and Processing Checklist in their review of Conditional Commitment requests, which assists in the review, processing, and closing of a guaranteed loan. B. Agency Review of Lender’s Underwriting Decisions It is the approved lender’s responsibility to underwrite loans, however, under limited circumstances, the Agency may determine that a more thorough review of the lender’s submission should be performed. The Agency must notify the lender in writing of the additional review. The Agency may review the lender’s underwriting decisions under the following circumstances: 1. Lenders who are new to the program When a new lender is approved for participation in the program, the initial application submissions will receive a thorough Agency review, including a review of the lender’s underwriting decisions. The purpose of these reviews is to provide HB-1-3555 (03-09-16) SPECIAL PN 15-5 Revised (08-05-25) PN 694 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. training and ensure that the lender has a complete and accurate understanding of the Agency’s requirements. The Agency will continue to review new lender underwriting decisions until the Agency is confident that the lender is performing satisfactorily. Additional training is provided when incomplete or deficient packages are received during initial submission. 2. Lenders that submit incomplete or inaccurate applications If a lender submits incomplete applications or applications with inaccurate information, the Agency may choose to review the lender’s underwriting to ensure that they understand the Agency’s requirements. Thorough reviews will continue until the lender demonstrates their ability to submit complete and accurate application packages on a regular basis. 3. Lenders with significant loan review findings Lenders that exhibit above average default, foreclosure, and loss claim activity may have their current loan submissions reviewed more thoroughly by the Agency. The lender will be referred to the Lender Oversight Branch for continued monitoring. C. Conditions for the Loan Guarantee Agency staff will determine if any conditions must be met for the loan to qualify for a guarantee. Terms and conditions will be listed and issued to the lender on Form RD 3555-18 or Form RD 3555-18E, Conditional Commitment for a Single Family Housing Loan Guarantee.

Source: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶15.5 — Agency Review Of Application Package · source URL · snapshot 0466acd1ea2d17a4