Wayne Maloney (202) 690-0498

**USDA RURAL DEVELOPMENT INTRODUCES GUARANTEED UNDERWRITING SYSTEM
PILOT**

**WASHINGTON**, D.C., September 28, 2006 -- Lenders will soon have the
ability to underwrite USDA Section 502, Single Family Housing Guaranteed
loans using the new Guaranteed Underwriting System (GUS). GUS was
developed by USDA Rural Development to automate a manual underwriting
process, which considers loan applications for approval. A unique GUS
feature is that it determines a borrower's income and a property's
eligibility for the Single Family Housing Guaranteed Loan Program
(SFHGLP).

"Through the use of cutting-edge technology, GUS will advance President
Bush's commitment to increase minority homeownership," said Agriculture
Under Secretary for Rural Development Thomas C. Dorr. "This program
offers a full service automated underwriting system which will be made
available in the future for private sector use." Currently eight lenders
are piloting the new system. The genesis of GUS came out of a high-level
discussion held three years ago between Dorr and then Federal Housing
Administration Commissioner John Weicher on ways to work cooperatively,
through sharing of knowledge resources, to automate USDA\'s manual
underwriting process.

GUS will enable participating lenders to receive faster loan decisions,
streamlined documentation requirements, better quality loans, more
consistency in program delivery, and will fulfill legal requirements
under the Government Paperwork Elimination Act and the Freedom to E-File
Act. Through GUS, the Agency expects to see the majority of loans
automatically underwritten, which enhances its ability to manage risk.
The Agency will continue to monitor data and changes in the market with
the added flexibility of adjusting underwriting standards when
necessary.

USDA Rural Development began a market test of GUS on August 1, 2006,
with a limited number of lenders. Participating lenders in Phase I of
the market test are First National Bank of Columbus, Neb.; Allied
Mortgage Capital Corporation of Rockwell, Texas; American Southwest
Mortgage of Oklahoma City, Okla.; Central National Bank of Junction
City, Kan.; Guaranty Trust of Murfreesboro, Tenn.; State Bank of Lincoln
of Lincoln, Ill.; The Mortgage Company of Junction City, Kan. and
Virginia Housing Development Authority of Richmond, Va. Additional
lenders will be added to the market test later this year in preparation
for full GUS implementation in January 2007.

Section 502 Guaranteed Loans are made to qualifying low- and
moderate-income families to purchase modest homes in rural areas. The
loans are made by mortgage lenders, such as banks, credit unions and
mortgage companies. Loans can be made up to 100 percent of the appraised
value of the property. Rural Development guarantees the loan made by the
lender in case of default by the borrower.

USDA Rural Development's mission is to deliver programs in a way that
will support increasing economic opportunity and improve the quality of
life for rural residents. As a venture capital entity, Rural Development
has invested more than \$72 billion since the beginning of the Bush
Administration to provide equity and technical assistance to finance and
foster growth in homeownership, business development, and critical
community and technology infrastructure. As a result, more than 1.2
million jobs have been created or saved through these investments.
Further information on rural programs is available at a local USDA Rural
Development office or by visiting USDA's website at
[http://www.rurdeve.usda.gov](http://www.rurdeve.usda.gov/).

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