USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶16.7 — Agency Review Of Closing Documents And Issuance Of The Guarantee

USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶16.7 — Agency Review Of Closing Documents And Issuance Of The Guarantee

16.7 AGENCY REVIEW OF CLOSING DOCUMENTS AND ISSUANCE OF THE GUARANTEE The Agency will review the required loan closing documents to ensure the lender has completed and fulfilled all requirements specified on the Conditional Commitment. A. Incomplete Closing Documents If the Agency determines that the closing documentation is incomplete or has correctable errors, the lender should be granted up to 30 days to correct the situation. The lender will be notified of incomplete packages by telephone, in writing, by e-mail, or, if necessary, by regular mail. Agency staff should make every effort to contact the lender and determine the time required to provide the necessary documentation. While the burden of submitting a complete loan closing package is on the lender, Agency staff should be cognizant that the lender cannot satisfy investor requirements without possession of the Agency’s Loan Note Guarantee. If the loan package is not complete within 30 days, and the account is in default, the Agency will not issue a Loan Note Guarantee. The Agency will return the loan closing package if corrections cannot be made within 30 days. B. Acceptable Closing Documentation Lenders: x Submit their upfront guarantee fee and technology fee electronically through the Pay.gov interface with LLC; x Submit all required documentation through the LLC system; and x Retrieve and print the Loan Note Guarantee within the LLC system. HB 1-3555 (03-09-16) SPECIAL PN 16-13 Revised (08-05-25) PN 649 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. Agency Staff: x Will review and determine if the closing documents are acceptable and issue the Loan Note Guarantee within 10 business days of receipt of the closing package; x Enter loan closing information into the Guaranteed Loan System (GLS); x Provide Form RD 3555-17 or Form RD 3555-17E, Loan Note Guarantee and the Loan Amortization Schedule to the lender; and x Retain a copy of Form RD 3555-17 or Form RD 3555-17E for the Agency’s Electronic Customer File (ECF). NOTE: The Loan Note Guarantee does not take effect until Form RD 3555-17 or Form RD 3555-17E is issued. C. Unacceptable Closing Documents The Agency will not issue the Loan Note Guarantee if there are errors in the closing documents, the loan does not meet all program requirements, does not meet all conditions set forth on the Conditional Commitment, or if the applicant receives cash back at closing in excess of the amount the borrower paid out of pocket for costs such as a deposit, earnest money, an appraisal, or other allowable items that may be financed with the loan being guaranteed. Loan funds and/or seller paid concessions may not be disbursed to the applicant(s). Lenders can correct oversights and unauthorized use of loan funds. If the lender can make the necessary corrections, the Agency will ensure the loan meets regulatory requirements prior to issuance of the Loan Note Guarantee. Frequently asked questions regarding corrections after the loan has closed can be found in Attachment 16-B. If the Agency determines the Loan Note Guarantee cannot be issued, the Agency will notify the lender of the reasons and provide review and appeal rights as described in Appendix 3 of this Handbook. Guaranteed loan funds will not be de-obligated until all HB 1-3555 (03-09-16) SPECIAL PN 16-14 Revised (08-05-25) PN 649 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. appeal rights have expired, even if the process continues across fiscal years. If the Agency is upheld on appeal, Agency staff will de-obligate the funds in GLS. If the Agency’s decision to deny the request is overturned, the approval official will immediately take the necessary steps to issue the Loan Note Guarantee.

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