SFH Guaranteed Origination
July 20, 2021
ADVANCE COPY NOTICE: HB-1-3555, Chapter 11
The Single Family Housing Guaranteed Loan Program (SFHGLP) is pleased to announce revisions to technical HB-1-3555, Chapter 11. An advance copy is available for review for a minimum of 30 days on USDA LINC Training and Resource Library, Loan Origination Tab, under the heading "New". The proposed changes will become effective after a Procedure Notice (PN) is issued and the changes are permanently published online. Below are highlighted revisions:
Chapter 11- Ratio Analysis
11.2 B. The Total Debt Ratio:
- Revolving accounts: “with no outstanding balance” are not required to be closed.
- Mortgages: Rental Property - Eliminated language regarding omission of mortgage debt. Guidance for entry of rental income in GUS is provided in the GUS Lender User Guide under 4.1.4.1.1, Retained Investment Properties.
- Added: Debt management plans:
- Include the monthly payment amount due from the counseling plan.
- Refer to Chapter 10 for guidance on credit exception and documentation requirements.
- Student Loans: Removed the phrase “the greater of” from Non-Fixed payment loans and added guidance regarding “when the payment is above zero” and “when the payment is zero”.
11.3 DEBT RATIO WAIVERS AND COMPENSATING FACTORS
A. Purchase Transactions: Debt ratio waivers
- GUS Refer, Refer with Caution, and manually underwritten loans without GUS assistance:
- Added: “The lender must document compensating factors to support a debt ratio waiver.”
- Added: “all” of the following conditions are met to the first paragraph.
- Debt Ratio Waiver Request and Agency Approval:
- Added: “The issuance of the Conditional Commitment for a Loan Note Guarantee represents Agency approval of the ratio waiver.”
B. Refinance Transactions: Debt ratio waivers
- Added a bullet: GUS files that receive a GUS recommendation of Refer or Refer with Caution are not supported by GUS, require debt ratio waivers, and supporting documentation must be submitted to the Agency.
- Added: “The issuance of the Conditional Commitment for a Loan Note Guarantee represents Agency approval of the ratio waiver”.
11.7 OBLIGATIONS NOT INCLUDED IN DEBT-TO-INCOME RATIOS
- Added: "unless a payment plan is in place" to the second bullet concerning Federal, state, and local taxes.
Questions regarding program policy and this announcement may be directed to the National Office Division at sfhgld.program@usda.gov or (202) 720-1452.
Thank you for supporting the Single-Family Housing Guaranteed Loan Program!
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