HB--1-3555, Chapter 3

HB-1-3555

(03-19-16) SPECIAL PN 3-1

Revised (07-21-23) PN 588

CHAPTER 3: LENDER APPROVAL

7 CFR 3555.51

3.1 INTRODUCTION

A lender is defined as an entity that originates, services, or holds a loan guaranteed by

the Agency.

The Single Family Housing Guaranteed Loan Program (SFHGLP) is not intended to

promote risky lending. For its success, the program relies on lenders to make sound

underwriting decisions. Because the Agency does not underwrite the loans it guarantees,

lenders that apply for loan guarantees must originate, underwrite, service, and hold loans

responsibly. To ensure that these standards are met, the Agency must approve a lender

before it participates in the SFHGLP. To be approved, a lender must agree to follow the

Agency’s program guidelines and consistently demonstrate high-quality in the areas of

loan origination, underwriting, servicing, and reporting. Once the Agency has approved

the lender, it may participate in the program as long as it maintains these standards and

continues to follow all program requirements. The Agency periodically monitors

approved lenders to verify that continued program participation is warranted.

3.2 LENDER APPROVAL CRITERIA [7 CFR 3555.51]

A lender must demonstrate that it has the expertise to make and/or service single-

family housing mortgage loans.

Lenders that have been approved for single-family housing loan-making activities by

organizations referenced in Paragraph A of this section are considered to have

demonstrated the ability to originate, underwrite, and service SFHGLP loans. In all other

cases, the Agency determines whether a lender is qualified by reviewing the lender’s

history, along with other documentation.

In all cases, lenders are required to provide evidence that all principal officers have a

minimum of two years of experience in originating or servicing guaranteed mortgage

loans. In addition, all guaranteed lenders must be registered in the System for Award

Management (SAM) system, which is validated by the Agency in the lender approval

process.

A. Approval from Another Recognized Source

Acceptable documentation includes a copy of the official letter or other verifiable

communication from an acceptable secondary market organization or other Federal

government agency showing that the lender is approved for participation by that entity.

The lender must also provide the additional documentation listed in Attachment 3-A,

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Paragraph 3.2 Lender Approval Criteria

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Lender Approval Checklist. The Agency reviews and confirms the information submitted by the

lender.

Acceptable secondary market organizations, Federal government, and state agencies

include:

• A State Housing Finance Agency (SHFA). Evidence that a private sector lender

is approved by a SHFA to participate in SHFA programs does not represent an

automatic approval to participate in the guaranteed program.

• The U.S. Department of Housing and Urban Development-Federal Housing

Administration (HUD-FHA), when the lender is approved as a supervised or non-

supervised mortgagee with Direct Endorsement Authority for title II lending

activity.

• Government National Mortgage Association (Ginnie Mae), when the lender is an

issuer of Ginnie Mae mortgage-backed securities.

• The U.S. Department of Veterans Affairs (VA), when the lender is a supervised

lender or is approved as a supervised or non-supervised mortgagee with the

authority to close loans under VA’s automatic guaranty procedure.

• Fannie Mae, when the lender is approved for single-family loan activities.

• Freddie Mac, when the lender is approved for single-family loan activities.

The Agency may revoke a lender’s approval to participate in the SFHGLP if the

lender fails to maintain the appropriate eligibility status or violates the terms and

conditions of the Agency’s lender agreement.

B. Approval by Demonstrated Ability

A lender that does not meet the conditions of Paragraph 3.2A may seek approval by

demonstrating its ability to originate and/or service sound loans. In such a case, the

lender must meet the following criteria:

• Be overseen by a Federal regulator, be a Farm Credit System (FCS) institution,

be an active participant with an approved lender agreement in another USDA

guaranteed loan program, or meet the requirements for demonstrated ability, as

outlined in this section;

• Have a minimum adjusted net worth of $250,000, or $50,000 in working capital

plus one percent of the total volume in excess of $25 million in guaranteed loans

originated, serviced, or purchased during the lender’s prior fiscal year, up to a

maximum required adjusted net worth of $2.5 million; and

HB-1-3555

Paragraph 3.2 Lender Approval Criteria

(03-09-16) SPECIAL PN 3-3

Revised (07-21-23) PN 588

• Have one or more lines of credit with a minimum aggregate of one million dollars.

1. Federal Oversight

A lender that is a federally regulated depository institution may be considered for

participation in the SFHGLP. The lender must provide an official letter, or other

verifiable communication, from the oversight authority that indicates the lender’s

ability to process, underwrite, and service single-family residential mortgage loans.

The documentation must confirm that Federal oversight is being provided by one of

the following Federal oversight entities:

• The Federal Reserve System;

• The Office of the Comptroller of the Currency (OCC);

• The Federal Deposit Insurance Corporation (FDIC);

• The National Credit Union Administration (NCUA); or

• The Federal Housing Finance Board regulating lenders within the Federal

Home Loan Bank (FHLB) system.

2. Experience with a USDA Program or Farm Credit System

A Farm Credit System institution or lender participating in certain other USDA

programs is eligible to participate in the SFHGLP if it can also demonstrate

experience in underwriting and servicing single-family residential mortgage lending.

Lenders meeting these criteria include:

• An FCS lender with direct lending authority; or

• A lender participating in other Rural Housing Service, Rural Business-

Cooperative Service, Rural Utilities Service, or Farm Service Agency

guaranteed loan programs that has an active lender agreement.

3. Demonstrated Ability

The lender must have a proven ability to originate, underwrite, and/or service

single-family mortgage loans and must have a staff with adequate knowledge and

expertise in these areas. Expert knowledge and experience in residential mortgage

lending may be demonstrated through the following documentation:

• A summary of residential mortgage lending activity. At a minimum, the

HB-1-355

Paragraph 3.2 Lender Approval Criteria

3-4

summary must include the dollar amount and number of residential mortgage

loans in its loan origination and servicing portfolio, along with percentages of

delinquencies, foreclosures, and credit losses. The Agency will examine the

summary to verify that the lender’s performance is comparable to that of other

participating lenders in good standing.

• Written criteria that outline the policies and procedures the lender

typically follows when originating, underwriting, and closing residential

mortgage loans. The quality control system must ensure that the lender

demonstrates safe and sound lending practices including, but not limited to,

the analysis and review of appraisals and other factors affecting property

values, credit analysis and review, and income analysis and review. In

addition, the policies and procedures must comply with all applicable laws

and regulations such as the Equal Credit Opportunity Act (ECOA), the Real

Estate Settlement Procedures Act (RESPA), and the Home Mortgage

Disclosure Act (HMDA).

• Evidence that the lender has an experienced loan underwriter on staff.

The lender must provide a copy of the underwriter’s signed resume showing

that the underwriter has at least two years of experience in underwriting single

family residential loans, and is knowledgeable of the principles, practices, and

techniques of residential mortgage lending.

4. Additional Requirements for Originating Lenders that do not Service Loans

A lender that does not intend to service SFHGLP loans must certify that it will

contract with an Agency-approved lender that agrees to follow all Agency servicing

requirements, and that has the capacity to hold funds for taxes and insurance in

escrow. Originating lenders should be prepared to escrow funds for taxes and

insurance when required to repurchase loans.

5. Additional Requirements for Lenders Servicing Loans

If the lender intends to service SFHGLP loans, the lender must provide the

following additional documentation:

• Written criteria concerning the policies and procedures for servicing

residential mortgage loans. The Agency will review these policies and

procedures to determine if escrow accounts are handled in compliance with

RESPA, and that all other applicable laws and regulations, such as the Fair

Credit Reporting Act (FCRA), are followed.

HB-1-3555

Paragraph 3.2 Lender Approval Criteria

(03-09-16) SPECIAL PN 3-5

Revised (07-21-23) PN 588

• Evidence of a written plan if the lender contracts for escrow services. If a

lender does not have an escrow system for taxes and insurance, it must submit

a written plan to the Agency for ensuring that taxes and insurance for

mortgage loans are paid when due.

• Evidence that the lender has serviced single-family residential mortgage

loans in the year before applying for Agency approval. This

documentation should include the number and dollar amount of the loans in

the lender’s portfolio, the number and percentage of loans in default

(categorized by 30-60-90-days late, in bankruptcy, and in foreclosure), and the

number, percentage, and dollar amounts of loans on which losses have been

paid.

The Agency reserves the right to re-evaluate a lender’s status from time to time.

Lenders who fail to follow established guidelines for real estate taxes and hazard

insurance premiums, or other conditions of the lender’s agreement, may have their

lender approval revoked by the Agency. The lender may be required to provide

information to support continued Agency approval, similar to the documentation

provided with its initial application.

C. Participation as an Agent of an Approved Lender

A lender that does not meet the requirements for Agency approval may participate in

the program as the agent of a lender approved by Rural Development. The lender

approved by Rural Development must designate the agent in writing and state the

functions that the agent performs on its behalf. The agent may be permitted to originate

the loan and close it in their name as long as the loan was reviewed by the approved

lender and is transferred to the approved lender immediately upon closing and prior to

issuance of a Loan Note Guarantee. The lender approved by Rural Development is

responsible for ensuring that its agent’s loan origination, underwriting, and closing

activities are in accordance with Agency standards. The Conditional Commitment for

Loan Note Guarantee and the Loan Note Guarantee will be issued to the approved lender.

3.3 APPLICATION

Lenders will submit Form RD 3555-16, Agreement for Participation in Single-Family

Housing Guaranteed/Insured Loan Programs of the United States Government, and the

necessary supporting documentation as outlined in Attachment 3-A, Lender Approval

Checklist, to the Loan Servicing Branch at [email protected].

HB-1-3555

Paragraph 3.3 Application

3-6

Quality Control Plan

Reliable and effective quality control (QC) programs are essential to a lender’s

success in the mortgage industry. Quality control begins prior to application intake and

continues through the mortgage process. The purpose of quality control is to monitor and

evaluate the integrity of the origination and servicing processes and is customized to the

lender’s organization, circumstances, and needs. The quality control plan must contain

the necessary controls as required by other recognized sources noted in Section 3.2A of

this chapter. At a minimum, the lender’s plan should include all of the following:

• Mission Statement or stated objective.

• Describe the lender’s participation with other Federal agencies, such as the

Department of Treasury and any other investors or partners. Include a statement

that the lender plans to operate within USDA Rural Housing Service guidelines.

• Written procedures for documenting a re-verification process. This includes

implementing a sampling methodology that consists of a representative sample of

Rural Development loans, has a consistent and timely review process, and

addresses document retention.

• A post-closing review process describing how a sampling of loans are

independently reviewed for adherence to lending guidelines.

• A quality control team that operates independently from loan origination,

underwriting, and servicing functions; or contracts out this function. If contracted

out, the lender must adequately monitor the performance of the contractor.

• Describe the separation of duties between the loan production staff and quality

control staff. Under no circumstances should the quality control review staff be

involved in the day-to day loan production.

• Describe the standard operating procedures for all employees who will be involved

with, or affected by, the quality control process.

• Describe the timelines of internal quality control reviews, including the

percentage of loans reviewed and the frequency of the quality control reviews.

For example, 10% of closed loans are independently reviewed each quarter by a

quality assurance specialist who was not involved in underwriting and closing

those loans.

• Quality control reviews should include a description of how appraisals or

property evaluation reports are reviewed.

HB-1-35

Paragraph 3.3 Application

(03-09-16) SPECIAL PN 3-7

Revised (07-21-23) PN 588

• Written procedures to report violations of laws or regulations, false statements,

and program abuses directly to appropriate authorities in a timely manner.

Information regarding violations must be reported to the Loan Servicing Branch

at [email protected].

• Ensure adequate quality control and data integrity checks are included for loans

processed through automated underwriting systems on a regular and timely basis.

• Ensure adequate monitoring of all vendors, contractors, and third-party providers

involved in the origination process (e.g. mortgage brokers, correspondents,

appraisers, and credit agencies).

• Identify training opportunities for lender staff.

B. Additional Requirements for Quality Control Plans for Servicing Lenders

Quality control plans for servicing lenders must contain the required information

identified in Section 3.3A, as well as address the following:

• How escrows are handled for taxes, hazard, and flood insurance (if applicable).

• How funds are applied when payments are received for principal and interest,

hazard and flood insurance, and taxes.

• What happens if excess funds are collected in escrow.

3.4 AGENCY REVIEW

The Agency review of the lender’s application includes the following:

• Ensuring that all required documents have been submitted and are completed

correctly. Incomplete applications cannot be approved, and the lender will be

advised of the omission(s) in writing.

• Form RD 3555-16 has been properly executed by a person authorized to bind the

lender to the terms stated on the form.

• Evidence that the lender’s demonstrated ability is consistent with the requirements

of this chapter.

• Evidence that neither the lender nor any of the lender’s principal officers have

been suspended or debarred from participation in Federal programs.

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Paragraph 3.4 Agency Review

3-8

• Evidence that the lender’s approval status with Fannie Mae, Freddie Mac, HUD, VA,

or another acceptable Government Agency is active at the time of the application to

the Agency.

• Verification the lender is registered in SAM.

A. Approval of Application [7 CFR 3555.52]

1. Pre-Approval

If the lender meets the criteria for an approved lender and provides the supporting

documentation as outlined in Attachment 3-A, the Agency will issue an approval

notice to the lender. Final approval is dependent upon the lender and all origination

and underwriting staff involved with the SFHGLP completing mandatory training.

The Agency will provide additional information on access to mandatory trainings as

part of the lender approval process. The purpose of the training is to provide an

overview of the SFHGLP objectives, lender responsibilities, required loan

documentation, and the process to obtain a Loan Note Guarantee. Any additional

staff hired after the initial lender approval should also complete all mandatory

trainings.

2. Final Approval

Upon completion of all mandatory trainings by the lender, the Agency will update

the lender pages of GLS and forward the lender a copy of the executed Form RD

3555-16, notifying the lender of their approval to participate in the SFHGLP. The

lender may begin participating in the program once final approval is obtained.

New lenders will be subject to an oversight review, as outlined in Paragraph 3.8

of this chapter.

B. Denial of Application

If the lender does not qualify for participation in the program, the Agency will

provide written justification along with appeal rights in accordance with Appendix 3 of

this Handbook.

A lender who does not meet the criteria to participate in the program as an approved

lender may act as an agent for an approved lender, as described in Paragraph 3.2C.

C. Record Retention

Lender approval files will be maintained and retained in accordance with Chapter 2.

HB-1-3555

(03-09-16) SPECIAL PN 3-9

Revised (07-21-23) PN 588

3.5 LENDER SALE OF GUARANTEED LOANS [7 CFR 3555.54]

SFHGLP loans can only be sold to lenders meeting the requirements of Paragraph

3.2. The purchasing lender must execute Form RD 3555-16 or have an approved Form

RD 3555-16 on file. The selling lender is responsible for providing the original Loan

Note Guarantee to the purchasing lender and must report the sale of the guarantee on

Form RD 3555-11, Guaranteed Rural Housing Lender Record Change, within 30 days of

the sale in accordance with Chapter 4, Paragraph 4.6.

3.6 LENDER RESPONSIBILITY

The lender will be responsible for the processing and servicing of the loan and may

use third party originators, such as agents or correspondents, in carrying out its

responsibilities. Lenders are fully responsible for their own actions and the actions of

those acting on the lender’s behalf. The approved lender must adhere to SFHGLP

guidelines as outlined in Chapter 4, Paragraph 4.8.

• Processing. The lender must abide by restrictions on loan purposes, loan

limitations, interest rates, and terms set forth in 7 CFR 3555 and this Handbook.

The lender will underwrite the loan and submit the necessary items as outlined in

Chapter 15 in order to receive a Conditional Commitment. The agent may close

the loan in its name, provided the loan is immediately transferred to the approved

lender to whom the guarantee will be issued.

• Servicing. Lenders are fully responsible for regular and default servicing and

maintaining security interest for all guaranteed loans. Regular and default

servicing requirements are outlined in Chapters 17 through 19 of this Handbook.

When servicing is subserviced to a third party, the lender will inform Rural

Development of the name and address of the servicer by utilizing Form RD 3555-

11.

3.7 EDUCATION AND OUTREACH

A. Lenders

Rural Development has developed a series of educational modules for the SFHGLP

which are available on the USDA Linc Training and Resource Library, located at

https://www.rd.usda.gov/resources/usda-linc-training-resource-library. These

educational modules are available in addition to the mandatory lender trainings utilized

for lender approval and recertification. Additional resources can be accessed on the

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Paragraph 3.7 Education and Outreach

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Agency’s SFHGLP web page located at https://www.rd.usda.gov/programs-

services/single-family-housing-guaranteed-loan-program.

B. Agency

The Agency will conduct outreach and lender education activities to encourage

eligible lending institutions to apply for approved lender status, as eligible rural

homebuyers benefit when their choice of lending institutions includes mortgage bankers,

mortgage brokers, credit unions, Federal Home Loan Banks, etc.

The Agency has Guaranteed training programs available. Lenders should contact the

Lender and Partner Activities Branch at [email protected] to request

individual trainings.

3.8 MONITORING A LENDER’S ORIGINATION AND SERVICING OF LOANS [7

CFR 3555.51]

Rural Development will conduct oversight reviews of the lender’s operations as

provided in this section. Form RD 3555-16 outlines the responsibilities and terms to

maintain approval for the SFHGLP. If Rural Development determines that the lender is

not fulfilling the obligations of Form RD 3555-16, or that the lender fails to meet the

required criteria, the lender will receive written notice of any deficiencies. If the lender is

unwilling or unable to correct the deficiencies, Rural Development will proceed with

termination as provided in Paragraph 3.9.

Form RD 3555-16 requires the lender to provide records pertaining to the SFHGLP

for review by the Agency. The Agency will conduct an oversight review on a periodic

basis as defined in Paragraph B of this section. Oversight reviews assist in Agency risk

management and validate that lenders are complying with SFHGLP regulations.

Oversight reviews include the examination of lender policies and procedures, cash

management practices, and individual borrower case files (loan origination and servicing

records, liquidation, and claim files).

A. Review Circumstances and Factors

• New Lender Oversight Review. Rural Development may review loans

originated by a newly eligible lender to ensure understanding of Agency

regulations. Thereafter, the lender will be subject to a review provided in

Paragraph 3.8B.

• Other reviews. Rural Development may elect to conduct more frequent

oversight reviews when major trends or weaknesses, such as loan delinquencies,

loan losses, failure to submit required data and reports, or other influencing

HB-1-3555

ragraph 3.8 Monitoring A Lender’s Origination and Servicing of Loans

(03-09-16) SPECIAL PN 3-11

Revised (07-21-23) PN 588

factors related to assuring that the Government’s interest is adequately protected,

have been noted, regardless of the volume of loans originated or serviced.

B. Conducting Oversight Reviews

Oversight reviews will be performed on each lender as noted in this section.

Oversight reviews may be conducted as an on-site review at the lender location or as a

desk review at a site determined by the Agency. The review should be conducted by

Agency staff or a designated representative that is knowledgeable of the lender functions

to be reviewed. Rural Development will determine the amount of time that is needed to

conduct the review. The review team members will utilize the Oversight Review Guide

when planning, conducting, and reporting reviews.

Three standards reviews may be performed:

• Loan origination review. A loan origination review is applicable to lenders who

perform all or a portion of the following functions: underwriting, processing, and

closing.

• Loan servicing review. A loan servicing review is applicable to a servicer which

is performing all or a portion of the following functions: reporting, loss mitigation,

loss claims, and property disposition.

• Expanded review. An expanded review is performed for lenders and servicers

that are both originating and servicing loans.

Oversight review findings will be communicated to the lender and/or servicer verbally

and in writing. The reviewers will work with the lender and/or servicer to correct any

findings identified. The clearance and follow-up process commences upon issuance of

the findings report by the Agency or their representative. Upon closure of the review, or

expiration of any follow-up period, a report will be prepared summarizing the review

performed. A copy of all oversight review reports will be maintained in the Electronic

Customer File (ECF) system.

3.9 LENDER RECERTIFICATION AND REVOKING LENDER ELIGIBILITY

The lender remains eligible as long as the lender meets the criteria in Paragraph 3.2 of

this chapter unless the lender’s status is revoked by Rural Development or another

Federal Agency. The Agency is required to review each approved lender’s eligibility at

least every two years, which includes verifying the lender has registered in SAM and

completed the mandatory recertification training. All approved lenders are required to

recertify their status by responding to the renewal notification email, sent to the lender,

within the timeframe provided.

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Paragraph 3.9 Lender Recertification and Revoking Lender Eligibility

3-12

Rural Development may terminate the lender’s approval due to noncompliance with

any of the eligibility requirements described in 7 CFR 3555.51. Status may also be

revoked if the lender violates the terms of Form RD 3555-16, fails to properly service any

guaranteed loan, or fails to adequately protect the interests of the lender and the

Government. In addition to revocation of eligible lender status, the lender may be

debarred by Rural Development, or may be required to indemnify Rural Development for

any losses paid.

If Rural Development terminates a lender’s approval, the lender will have 30 days

from the date of receipt of the Agency’s notification to appeal the decision. Refer to

Appendix 3 of this Handbook for additional information regarding appeal procedures.

Notifications will be sent electronically to the email point of contact on file, marked with

a read receipt. If the email is returned as “undeliverable,” the Agency will contact the

lender by phone to obtain a current point of contact. The email notice will then be sent to

this individual with a read receipt. Read receipt notifications will be saved in the

Agency’s records as evidence that the lender was sent notice that they no longer met

approved lender status. Agency staff will update GLS by removing the lender

designation and any authorizations. Closed lender eligibility files will be retained in

accordance with RD Instruction 2033-A.

3.10 VOLUNTARY WITHDRAWAL

The lender may voluntarily withdraw from participation in the SFHGLP. Lenders

must notify the Agency of their intent to withdraw participation, along with a plan to

transfer their Agency book of business where pending, unclosed Conditional

Commitments, and loans serviced or held are transferred to another approved lender

participating in the SFHGLP.

HB-1-355

Attach

ment 3-A

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Revised (07-21-23) PN 588

ATTACHMENT 3-A

LENDER APPROVAL CHECKLIST

Section 3555.51 of 7 CFR Part 3555 and Chapter 3 of this Handbook describe the qualifications required

to become an Agency approved lender. Other entities may participate as an approved lender’s agent or

correspondent, but only approved lenders are responsible for underwriting and servicing and may hold the

Loan Note Guarantee on a Rural Development guaranteed loan. Lenders may utilize the following

checklist to ensure a complete application is submitted. Requests must contain all of the following

information, in the order listed, and be submitted to Loan Servicing Branch at sfhglpservici[email protected].

Lender Approval Checklist

USDA Rural Development

Lender Information

Name:

TAX

ID:

DBA Name(s), if applicable. Use separate sheet for any additional DBAs:

Geographic Address:

Mailing Address (if different)

Phone:

Fax:

County:

Chartered State/Headquarters:

Website:

Company E-Mail:

Contact

Person

Name:

Phone:

E-Mail:

Title:

Fax:

Minority/Women-Owned Business (Optional)



Minority-Owned



Women-Owned



Minority-

Owned/

Women-Owned

Provide the following information for all principal officers, directors, and senior managers. Additional sheets may be attached, if

necessary.

Legal Full Name, including M.I.

Title/Physical Location

Lender Functions

Lender Type (Select Applicable):



Originate



Commercial Bank



Credit Union



CDFI



Others



Underwrite



Mortgage Loan



Savings Bank



Non-traditional



Service



Insurance Co



Banks for Co-Ops



USDA Agency



Own



Farm Credit

System



State Housing

Finance Agency



Specialty Servicer

HB-1-3555

Attachment 3-A

Page 2 of 3

Current eligibility designations [Section 3.2 of HB-3555 Chapter 3]:



Agency Certifications

(Select applicable)

Preferred Method of Evidence/Certification (Submit as supplemental information)

Applicable Agency Assigned

Identification



Fannie Mae

Fannie Mae Form 582, “Annual Eligibility Certification Report”



Freddie Mac

Freddie Mac Form 16SF, “Annual Eligibility Certification Report”



U.S. Department of Housing

and Urban Development –

Federal Housing

Administration (HUD-FHA)

Letter showing lender approved by HUD as a Title II supervised or non-supervised

mortgagee for submission of one to four family housing applications for Federal Housing

Mortgage Insurance or as an issuer of Ginnie Mae mortgage backed securities “supervised”

or “non-supervised.”



U.S. Department of Veterans

Affairs (VA)

Letter showing lender approved as a supervised or non-supervised “automatic” mortgagee

with direct lending authority for VA



State Housing Finance

Agency (SFHA)

N/A



Farm Credit Service (FCS)

 Lender must have direct lending authority. Provide Membership letter.

 Financial statements that demonstrate the lender meets the financial requirements

described in Section 3.2B.



Lenders participating in

USDA guaranteed loan

programs.



Copy of executed agreement showing approval by Rural Housing Service, Rural

Business and Cooperative Service, Rural Utilities Programs and/or the Farm Service

Agency.

 Financial statements that demonstrate the lender meets the financial requirements

described in Section 3.2B.



Evidence of Federal oversight

(if applicable)

 Evidence and supporting documentation per Section 3.2 of Chapter 3 of Federal

oversight by any of the following:

 The Federal Reserve System;

 The Office of the Comptroller of the Currency (OCC);

 The Federal Deposit Insurance Corporation (FDIC);

 The National Credit Union Administration (NCUA); or

 The Federal Housing Finance Board regulating lenders within the Federal

Home Loan Bank (FHLB) system.

 Financial statements that demonstrate the lender meets the financial requirements

described in Section 3.2B.



Evidence of demonstrated

ability in underwriting and/or

servicing (if applicable).

 A summary of residential mortgage lending activity.

 Written criteria that outline the policies and procedures the lender typically follows

when originating, underwriting, and closing residential mortgage loans.

 Evidence that the lender has an experienced loan underwriter on staff.

 Financial statements that demonstrate the lender meets the financial requirements

described in Section 3.2B.

List of Supplemental Information to be Submitted with Lender Approval Checklist [Check the box to indicate that each

required document has been included with the lender approval request package.]

Form RD

3555-16

Agreement for Participation in Single-Family Housing Guaranteed/Insured Loan Programs of the United States Government (Lender

Agreement). https://formsadmin.sc.egov.usda.gov/eFormsAdmin/welcomeAction.do?Home



2. Resume

Evidence of Underwriter’s qualifications and experience in the industry and evidence that all principal officers have a minimum of two years

of experience in originating or servicing guaranteed mortgage loans.



Retail

Lender –

Spreadsheet

If your firm is a retail lender, provide complete contact information (addresses, telephone numbers, fax numbers, and e-mail addresses) for

your branch locations, loan processing/underwriting departments, loan servicing, and a contact person for loan production. Information

assists in populating Rural Development’s lender record database.



4. Wholesale

Lender or

Servicing

Lender-

Spreadsheet

If your firm is a wholesale lender or a servicing lender, provide a general description of your services (loan processing, underwriting, table

funding, loan servicing, real estate owned (REO) disposition, etc.) and provide complete contact information (address, telephone number, fax

number, and e-mail addresses) for your various departments, including regional account executives.



5. Underwriting

Outline

A brief outline of underwriting criteria from the lender’s internal loan policy manual. Include a statement to use forms approved by the

Federal Housing Administration (FHA), Fannie Mae, or Freddie Mac.



HB-1-355

Attachment 3-A

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(03-09-16) SPECIAL PN

Revised (07-21-23) PN 588

6. Quality Control Plan

General requirements for quality control plans:

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Must be in writing outlining policies and procedures along with any forms and checklists used in the process.

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Lender’s Mission Statement or stated objective.

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Employees must operate independently of loan origination and servicing departments, or the

lender/servicer may contract out this function. If this function is contracted out, the lender must

adequately monitor the performance of the contractor.

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Identify how escrows are handled for taxes, hazard, and flood insurance (if applicable).

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Identify what happens if excess funds are collected in escrow.

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Have procedures to report non-compliance to the highest levels of management. May be monthly or, at the

least, a quarterly basis.

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Have procedures to report non-compliance or suspected misrepresentation to the appropriate regulatory

authorities.

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Identify training opportunities for lender/servicer staff.

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Set timeframes for review and follow-up procedures.

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Have procedures in place to monitor any third party originators (TPOs).

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Include a consistent process to sample select and review SFHGLP loans.

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Training Certification

New Mandatory Lender Training

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Certifications/Acknowledgments

I certify I am a corporate officer and/or principal/owner of the above-named entity with the authority to legally bind the organization and to execute

certifications and acknowledgements on behalf of the entity/organization named. I certify information provided and any accompanying documentation is true

and accurate to the best of my knowledge and belief.

Name: Title:

Signature: Date:

Send the executed Lender Agreement, Checklist, and Supplemental Information to sfhglpservici[email protected].