Revisions to Handbook-1-3550

USDA Rural Development sent this bulletin at 02/10/2026 02:09 PM EST

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USDA Rural Development - Together, America Prospers

SFH Direct Loan and Grant Programs

February 10, 2026

Revisions to Handbook-1-3550

With the posting of Procedure Notice (PN) 655 dated February 10, 2026, changes were made to Handbook 1-3350, Chapters 3-8 and 10, as well as Appendix 3. To follow are a few key highlights of the changes, but please review the PN carefully for more details:

Key Policy Changes

Loan Limits: Set at 60% of HUD limits.
Certified Packaging Fee: Capped at $750.
Income Calculation: SNAP benefits removed from income consideration.
Appraisal Requirement: Must be completed prior to obligation; no “subject to” appraisals.
Loan Terms: 38-year term requires State Director approval.
Leveraged Loans: Updated guidance on amount needed for priority processing.
Handbook Letter Updates:

Handbook Letters 2 & 3-B updated.
Handbook Letter 4 removed.

These changes reflect our commitment to responsible lending practices and program integrity, ensuring that resources are used effectively to support rural homeownership for years to come. Thank you for supporting the Single Family Housing Direct Loan Program!

Program Information

Single Family Housing Direct Loans

Single Family Housing Repair Loans and Grants

Mutual Self Help Housing Technical Assistance Grants

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