USDA Technical Handbook HB-1-3555 §12.13 — Lender Requirements
USDA HB-1-3555 §12.13 (Lender Requirements). Gap-fill (verbatim).
Verbatim regulatory text
Verbatim provisions from USDA Technical Handbook HB-1-3555 §12.13 — Lender Requirements — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
USDA HB-1-3555 12.13 — Lender Requirements
NDER REQUIREMENTS Approved lenders will be responsible for monitoring construction of the subject property, overseeing disbursement of mortgage proceeds, and obtaining documentation that confirms the construction of the subject property is complete. By submitting the request for the Conditional Commitment, the lender is self-certifying that they have staff with two or more years’ experience making and administering construction loans, or
USDA HB-1-3555 12.13 — Lender Requirements
05-05-25) PN 640 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. employ a construction loan management company with two or more years' experience as their agent. Lenders are responsible to ensure that builders’ experience is relevant to the loan type. Repair and renovation experience is not a substitute for experience making and administrating new construction loans. The lender must meet the following conditions to offer this loan feature: x Lenders will ensure the utilization of a fixed price construction contract; x Conduct investigations and obtain documentation to confirm the eligibility of construction contractors/builders, and their construction loan management company if they contract one; x Approve construction contractors, construction loan management companies, or builders upon submittal and review of evidence the contractor/builder meets requirements set forth in
USDA HB-1-3555 12.13 — Lender Requirements
2.14 of this Chapter; x Agree to retain evidence of contractor/builder/construction loan management company approval for future review by the Agency; x For loans closed prior to commencement of construction: o Loans securitized individually may disburse proceeds for the cost of the land, or the balance owed on the land, and Agency allowed closing costs. Any balance of the mortgage proceeds, including the “custodial reserve account,” must be placed into a reserve account. o Lenders utilizing a warehouse line of credit will not be required to disburse all funds at closing nor required to reserve all funds prior to the commencement of construction. x Approve and disburse mortgage proceeds in accordance with the construction loan agreement, with prior written approval by the borrower and confirmation of work completion prior to disbursement. The lender must maintain a draw and disbursement ledger for each single close loan. The lender is representing they meet the criteria of this section when requesting a commitment for loan note guarantee.
USDA HB-1-3555 12.13 — Lender Requirements
05-05-25) PN 640 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.