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SFH Guaranteed Origination
May 6, 2024
Updates to HB-1-3555, Chapters 9, 10, and 16
The Single Family Housing Guaranteed Loan Program (SFHGLP) is pleased to announce revisions to technical Handbook 1-3555, Chapter 9, Income Analysis; Chapter 10, Credit Analysis; and Chapter 16, Closing the Loan and Requesting the Guarantee. These changes became effective upon the recent issuance of a Procedure Notice (PN). Below are the highlighted revisions:
Chapter 9 – Income Analysis
- Clarified that tax transcripts not received prior to closing will not delay the loan closing, but are still required to be obtained and retained in the lender’s permanent loan file.
- Included written and email verifications as acceptable methods for verifying employment within 10 days of loan closing.
- Clarified the most recent asset information available at the time of loan application should be obtained by the lender.
- Removed “part-time income” from the Income and Documentation Matrix (Attachment 9-A) and included this type of income under “base wages.”
- Clarified repayment income guidance for “unreimbursed employee or business expenses” on the Income and Documentation Matrix (Attachment 9-A).
- Clarified that the use of social security benefits as repayment income is permissible when the income is reasonably expected to continue for at least 3 years into the mortgage.
- Added “foreign assets” to the Assets and Reserves Matrix (Attachment 9-A).
- Updated guidance on the sourcing of gift funds to eliminate the level of sensitive financial documentation requested from the gifting party.
- Updated the list of Federally Mandated Exclusions from Income (Attachment 9-D).
Chapter 10 – Credit Analysis
- Added monthly subscription services, gym memberships, etc. to the list of eligible sources of non-traditional credit.
Chapter 16 – Closing the Loan and Requesting the Guarantee
- Updated the maximum insurance deductible permitted to 5% of the total coverage amount for hazard insurance and $10,000 for flood insurance.
- Clarified that when permitting a high deductible, lenders must be mindful of the applicant’s repayment ability to ensure the deductible selected is reasonable and will not cause undue hardship on the applicant.
Questions regarding program policy and this announcement may be directed to sfhgld.program@usda.gov or (833) 314-0168.
Thank you for supporting the Single-Family Housing Guaranteed Loan Program!
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