The U.S. Department of Agriculture, Rural Housing Service (“RHS”) has issued a final rule to implement changes to the Single-Family Housing Guaranteed Loan Program (“SFHGLP”) to mandate the use of the RHS Guaranteed Underwriting System (“GUS”) for all supported loan originations and the Lender Loan Closing System (“LLC”) for loan closings. Currently, the RHS allows approved lenders to submit applications for loan guarantee requests in GUS, or by mail and email.
The final rule, which amends regulations found in 7 CFR part 3555, subparts C and D, requires that all SFHGLP loan products to be originated through GUS. Loans that are not supported by GUS may continue to be manually underwritten, including streamlined-assist refinance loans, and loans under select pilot programs. Also, loans that are downgraded by GUS will continue to be eligible for manual underwriting. Manually underwritten loans require full documentation review, and credit score validation or compensating factors. All loan submissions, manual and automated, must submit supporting loan documentation through the RHS automated systems.
The RHS states that the changes are part of an effort to streamline the progressing of SFHGLP applications through increased automation, and to align the RHS’s program “with mortgage industry expectations in the domain of information technology.” The GUS is compatible with most Loan Origination Systems and Point of Sale vendors in the industry.
The final rule is effective May 9, 2022. To view the Federal Register (82 FR 6773) for additional information, click here..
