HB-1-3550

APPENDIX 3 

HANDBOOK LETTERS REFERENCED IN THIS HANDBOOK

Handbook Letter 1 (3550), Moderate Income Options 

Handbook Letter 2 (3550), Funds Not Available 

Handbook Letter 3-A (3550), Waiting Period (Funds Not Available)

Handbook Letter 3-B (3550), Waiting Period (Extended Processing Timeframe)

Handbook Letter 4 (3550), Funds Not Available – Certificate of Eligibility and/or Property Identified 

Handbook Letter 5 (3550), Cover Letter for Initial Disclosures Package

Handbook Letter 10 (3550), Status of Offer to Buy Single Family Housing REO Property 

Handbook Letter 11 (3550), Request Information

Handbook Letter 12 (3550), Notification of Approval (504 Grant and/or Loan) 

Handbook Letter 15 (3550), Standardized Adverse Decision Letter 

Handbook Letter 16A (3550), Eligibility of Self-Help Applicants- New Construction or Acquisition 

Rehabilitation 

Handbook Letter 16B (3550), Eligibility of Self-Help Applicants- Owner Occupied Rehabilitation 

Handbook Letter 17 (3550), Adverse Decision Involving An Appraisal

Handbook Letter 18 (3550), Unfavorable Decision After State Director Review Of An Appraisal 

Handbook Letter 19 (3550), Pre-qualification Review

Handbook Letter 20 (3550), Response to Request to Sale for Less Than the Debt

Appendix 3, Page 1 of 1 

(01-23-03) SPECIAL PN 

Revised (02-09-24) PN 606
HB-1-3550

Handbook Letter 1 (3550)

REFERENCE: Field Office Handbook Chapter 3 

SUBJECT: Moderate Income Options

Date: [ insert today’s date ] 

[ insert applicant(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert applicant(s) street/post office address ]

[ insert city, state, and zip code ] 

Dear [ insert applicant last name(s) (Mr., Mrs., Ms.) ]:

Information obtained while processing your application for Rural Development loan assistance indicates 

that your adjusted annual household income exceeds the maximum low-income limit for this area, which 

is $(insert the applicable income limit). The following options are available to you in obtaining housing:

1. Sale of Real Estate Owned (REO) Property. This is the sale of a property that is owned by the 

Government. Rural Development acquires title to properties periodically and welcomes you to visit 

www.dawsonsmanagement.com (click on USDA properties) to view the changing availability of 

properties.

2. A transfer and assumption of an existing Rural Development loan. You may assume the unpaid 

balance of a loan from a Rural Development borrower whose property is for sale. Equity or repairs would 

need to be paid for with cash provided by you.

3. A Guaranteed Rural Housing loan. If you wish to learn more about this program and obtain a list of 

participating lenders, please contact this office at (insert field office address).

4. Other credit. You may wish to pursue financing through a private lending institution.

(01-23-03) SPECIAL PN

Revised (10-19-23) PN 595
HB-1-3550

Handbook Letter 1 (3550)

Page 2 

Applications for the purchase of an REO property or loan transfer and assumption are given funding 

priority. If you are interested in a specific REO property or loan transfer and believe you can meet the 

conditions outlined above, you should notify this office within 15 days of receipt of this letter. If we do 

not hear from you within the specified time frame, your application will be withdrawn. Please refer to 

Attachment 1-C in this letter regarding your ability to have the decision further reviewed.

Sincerely,

( insert name of the Loan Approval 

Official ) ( insert title of the Loan 

Approval Official) 

Attachment

[Attachment 1-C of Chapter 1]
HB-1-3550

Handbook Letter 2 (3550)

REFERENCE: Field Office Handbook Chapter 3 

SUBJECT: Funds Not Available

Date: [ insert today’s date ] 

[ insert applicant(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert applicant(s) street/post office address ]

[ insert city, state, and zip code ] 

Dear [ insert applicant last name(s) (Mr., Mrs., Ms.) ]:

Rural Development cannot continue to process your application at this time due to the lack of availability 

of funds for households within your income category. However, based on a review of your verified credit 

and financial information, you have been determined eligible for loan services through this Agency. The 

approximate waiting period before funds may be available to consider your loan request is ( insert 

approximate days/months funds will be available ).

Once funding is available to consider your loan request, we will notify you with further instructions. You 

may be asked to provide the Agency with updated information so that we can confirm your continued 

eligibility.

Please be advised that Rural Development has a homeownership education requirement for first-time 

homebuyers. If you are a first-time homebuyer, you will be required to provide documentation of 

completion of an acceptable homeownership education course. Documentation must be in the form of a 

certificate of completion or letter from the provider of the homeownership education. Our office can 

assist you in locating an acceptable provider. We strongly encourage that applicants look into and take 

the training early in the process. In the meantime, do not incur debts for items such as a building site, or 

the repair, purchase, or construction of a home; there is no guarantee that the Agency will extend you 

financing.

(01-23-03) SPECIAL PN

Revised (06-04-18) PN 513
HB-1-3550

Handbook Letter 2 (3550)

Page 2 

If you are planning to assume the unpaid balance of a loan from an existing Rural Development borrower 

or purchase a Government Real Estate Owned property, you should advise this office. These transactions 

can be processed without delay. You may also wish to discuss eligibility requirements for the Guaranteed 

Rural Housing loan.

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit 

applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the 

applicant has the capacity to enter into a binding contract); because all or part of the applicant’s income 

derives from any public assistance program; or because the applicant has in good faith exercised any right 

under the Consumer Credit Protection Act. The federal agency that administers compliance with this law 

concerning this creditor is the Federal Trade Commission. If a person believes he or she was denied 

assistance in violation of this law, they should contact the Federal Trade Commission, Washington, D.C. 

20580.

The Fair Housing Act prohibits discrimination in real estate related transactions, or in the terms or 

conditions of such a transaction, because of race, color, religion, sex, disability, familial status, or national 

origin. The federal agency that is responsible for enforcing this law is the U. S. Department of Housing 

and Urban Development. If a person believes that they have been discriminated against in violation of 

this law, they should contact the U. S. Department of Housing and Urban Development, Washington,

D.C. 20410 or call (800) 669-9777.

Sincerely,

[insert name of Loan Approval Official] 

[insert title of Loan Approval Official]
HB-1-3550

Handbook Letter 3-A (3550)

REFERENCE: Field Office Handbook Chapter 3 

SUBJECT: Waiting Period (Funds Not Available)

Date: [insert today’s date]

[insert applicant(s) first/mi/last name(s) (Mr., Mrs., Ms.)] 

[insert applicant(s) street/post office address]

[insert city,state, and zip code]

Dear [insert applicant last name(s) (Mr., Mrs., Ms.)]:

The rural housing application that you submitted to Rural Development on [insert receipt date] remains 

active.

However, resources are still currently unavailable to consider your loan request. The approximate waiting 

period is now [insert # of months/days].

Please complete the enclosed form if you are still interested in Rural Development assistance and update 

your current address and telephone number. Your failure to return the enclosed form to this office within 

15 days of the date of this letter will result in the withdrawal of your application. If your application is 

withdrawn, you may reapply.

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit 

applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the 

applicant has the capacity to enter into a binding contract); because all or part of the applicant’s income 

derives from any public assistance program; or because the applicant has in good faith exercised any right 

under the Consumer Credit Protection Act. The federal agency that administers compliance with this law 

concerning this creditor is the Federal Trade Commission. If a person believes he or she was denied 

assistance in violation of this law, they should contact the Federal Trade Commission, Washington, D.C. 

20580.

(01-23-03) SPECIAL PN

Revised (10-19-23) PN 595
HB-1-3550

Handbook Letter 3-A (3550)

Page 2 

The Fair Housing Act prohibits discrimination in real estate related transactions, or in the terms or 

conditions of such a transaction, because of race, color, religion, sex, disability, familial status, or national 

origin. The federal agency that is responsible for enforcing this law is the U. S. Department of Housing 

and Urban Development. If a person believes that they have been discriminated against in violation of 

this law, they should contact the U. S. Department of Housing and Urban Development, Washington,

D.C. 20410 or call (800) 669-9777.

Feel free to contact this office at [insert phone number] if you have any questions. 

Sincerely,

[insert name of Loan Approval Official] 

[insert title of Loan Approval Official]

Enclosure
HB-1-3550

Handbook Letter 3-A (3550)

Page 3 

TO: [insert name and address of applicable Rural Development field office]

I am still interested in receiving rural housing assistance through Rural Development. Please keep my 

application active. My current contact information is as follows:

Name:

(Please print)

Address: 

(Street/Post Office Address)

(City, State, and Zip Code)

Telephone: 

(Please include area code)

Email: 

THIS INFORMATION HAS /HAS NOT CHANGED SINCE YOU LAST

CONTACTED ME. (Please check either "has" or "has not" above.)

Signed by: Date:

Applicant

Signed by: Date:

Applicant

Note: If you wish to have your application remain on file, please complete this form, 

sign and date it, then return it to the Rural Development office processing your loan 

application. Your response must be received within 15 days from the date on the 

attached letter of [insert today's date]. 

(01-23-03) SPECIAL PN

Revised (10-19-23) PN 595
HB-1-3550

Handbook Letter 3-B (3550)

REFERENCE: Field Office Handbook Chapter 3 

SUBJECT: Waiting Period (Extended Processing Timeframe)

Date: [insert today’s date]

[insert applicant(s) first/mi/last name(s) (Mr., Mrs., Ms.)] 

[insert applicant(s) street/post office address]

[insert city,state, and zip code]

Dear [insert applicant last name(s) (Mr., Mrs., Ms.)]:

The rural housing application that you submitted to Rural Development on [insert receipt date] remains 

active. However, we are currently unable to consider your loan request due to extended processing 

timeframes. The approximate waiting period until your application will be processed to determine eligibility 

is [insert # of months/days].

[DELETE THE FOLLOWING PARAGRAPH WHEN SENDING THE INITIAL HB LETTER 

3-B (following paragraph is only to be included when sending a subsequent HB Letter 3-B).] 

Please complete the enclosed form if you are still interested in Rural Development assistance and 

update your current address and telephone number. Your failure to return the enclosed form to this 

office within 15 days of the date of this letter will result in the withdrawal of your application. If your 

application is withdrawn, you may reapply.

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit 

applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the 

applicant has the capacity to enter into a binding contract); because all or part of the applicant’s income 

derives from any public assistance program; or because the applicant has in good faith exercised any right 

under the Consumer Credit Protection Act. The federal agency that administers compliance with this law 

concerning this creditor is the Federal Trade Commission. If a person believes he or she was denied 

assistance in violation of this law, they should contact the Federal Trade Commission, Washington, D.C. 

20580.

The Fair Housing Act prohibits discrimination in real estate related transactions, or in the terms or 

conditions of such a transaction, because of race, color, religion, sex, disability, familial status, or national 

origin. The federal agency that is responsible for enforcing this law is the U. S. Department of Housing 

and Urban Development. If a person believes that they have been discriminated against in violation of 

this law, they should contact the U. S. Department of Housing and Urban Development, Washington,

D.C. 20410 or call (800) 669-9777.

Feel free to contact this office at [insert phone number] if you have any questions.

Sincerely,

[insert name of Loan Approval Official] 

[insert title of Loan Approval Official]

Enclosure

 (10-19-23) PN 595
HB-1-3550

Handbook Letter 3-B (3550)

Page 2 

[Agency reminder: Do not send this attachment with 

initial HB Letter 3-B, only include this attachment if a 

follow up HB Letter 3-B is needed. Delete this 

reminder when sending the attachment to the applicant] 

TO: [insert name and address of applicable Rural Development field office]

I am still interested in receiving rural housing assistance through Rural Development. Please keep my 

application active. My current contact information is as follows:

Name: 

(Please print)

Address: 

(Street/Post Office Address)

(City, State, and Zip Code)

Telephone: 

(Please include area code)

Email: 

THIS INFORMATION HAS /HAS NOT CHANGED SINCE YOU LAST

CONTACTED ME. (Please check either "has" or "has not" above.)

Signed by: Date: Applicant

Signed by: Date: Applicant

Note: If you wish to have your application remain on file, please complete this form, 

sign and date it, then return it to the Rural Development office processing your loan 

application. Your response must be received within 15 days from the date on the 

attached letter of [insert today's date]. 
HB-1-3550

Handbook Letter 4 (3550)

REFERENCE: Field Office Handbook Chapter 3 

SUBJECT: Funds Not Available – Certificate of Eligibility and/or Property Identified

Date: [ insert today’s date ] 

[ insert applicant(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert applicant(s) street/post office address ]

[ insert city, state, and zip code ] 

Dear [ insert applicant last name(s) (Mr., Mrs., Ms.) ]:

You are receiving this letter because you have been deemed eligible for Rural Development assistance 

and:

 You have been issued a Certificate of Eligibility (COE).

 You have submitted a purchase agreement or sales contract for a property.

Unfortunately, Rural Development cannot continue processing your application at this time due to a 

temporary lack of funds for households within your income category. You should immediately:

 Stop searching for a property unless you find a seller who is willing to agree to a closing date 

that is at least 30 days beyond the approximate waiting period listed below.

 Speak with the seller about extending the closing date to at least 30 days beyond the 

approximate waiting period listed below. If the seller is willing to extend the closing date, 

please submit a copy of the addendum to the contract to Rural Development.

The approximate waiting period before funds may be available to consider your loan request is

[ insert approximate days/months funds will be available ]. We will notify you once funding is available 

to consider your loan request.

If you are planning to assume the unpaid balance of a loan from an existing Rural Development borrower 

or purchase an Agency Real Estate Owned property, you should advise this office. These transactions can 

be processed without delay.

(01-23-03) SPECIAL PN

Revised (01-06-17) PN 492
HB-1-3550

Handbook Letter 4 (3550)

Page 2 

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit 

applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the 

applicant has the capacity to enter into a binding contract); because all or part of the applicant’s income 

derives from any public assistance program; or because the applicant has in good faith exercised any right 

under the Consumer Credit Protection Act. The federal agency that administers compliance with this law 

concerning this creditor is the Federal Trade Commission. If a person believes he or she was denied 

assistance in violation of this law, they should contact the Federal Trade Commission, Washington, D.C. 

20580.

The Fair Housing Act prohibits discrimination in real estate related transactions, or in the terms or 

conditions ofsuch a transaction, because of race, color, religion, sex, disability, familial status, or national 

origin. The federal agency that is responsible for enforcing this law is the U. S. Department of Housing 

and Urban Development. If a person believes that they have been discriminated against in violation of 

this law, they should contact the U. S. Department of Housing and Urban Development, Washington,

D.C. 20410 or call (800) 669-9777.

Sincerely,

[insert name of Loan Approval Official] 

[insert title of Loan Approval Official]
HB-1-3550

Handbook Letter 5 (3550)

REFERENCE: Field Office Handbook Chapter 3 

SUBJECT: Cover Letter for Initial Disclosures Package

Date: [insert today’s date]

[ insert applicant(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert applicant(s) street/post office address ]

[ insert city, state, and zip code ] 

Dear [ insert applicant last name(s) (Mr., Mrs., Ms.) ]:

Thank you for submitting an application for a single family housing loan in the amount of (insert the loan 

amount as shown on the Loan Estimate). In accordance with the Integrated Mortgage Disclosures under 

the Real Estate Settlement Procedures Act and the Truth in Lending Act, the following is provided:

• The Loan Estimate Disclosure. This document is provided to show the maximum costs 

associated with the loan product; the final costs may be lower. If there is a change in 

circumstances, such as a change in the loan amount, a revised Loan Estimate may be 

issued. The payment amount does not reflect any possible payment assistance nor does 

the issuance of a Loan Estimate constitute an approval of a loan.

• A List of Settlement Service Providers. These providers are not endorsed by or affiliated 

with Rural Development and applicants may select service providers not on this list.

• The Consumer Financial Protection Bureau Booklet, “Your home loan toolkit: A stepby-step guide”. 

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit 

applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the 

applicant has the capacity to enter into a binding contract); because all or part of the applicant’s income 

derives from any public assistance program; or because the applicant has in good faith exercised any right 

under the Consumer Credit Protection Act. The federal agency that administers compliance with this law 

concerning this credit is the Federal Trade Commission. If a person believes he or she was denied 

assistance in violation of this law, they should contact the Federal Trade Commission, Washington, DC 

20580.

(01-23-03) SPECIAL PN

Revised (11-18-22) PN 571
HB-1-3550

Handbook Letter 5 (3550)

Page 2 

The Fair Housing Act prohibits discrimination in real estate related transactions, or in the terms of 

conditions of such a transaction, because of race, color, religion, sex, disability, familial status, or national 

origin. The federal agency that is responsible for enforcing this law is the U. S. Department of Housing 

and Urban Development. If a person believes that they have been discriminated against in violation of 

this law, they should contact the U. S. Department of Housing and Urban Development, Washington, DC 

20410 or call (800) 669-9777.

If you have any questions or need further information, please contact this office at (insert field office 

address).

Sincerely,

( insert name of the Loan Originator ) 

( insert title of the Loan Originator )
HB-1-3550

Handbook Letter 10 (3550)

REFERENCE: Field Office Handbook Chapter 16

SUBJECT: Status of Offer to Buy Single Family Housing REO Property

Date: [ insert today’s date ] 

[ insert applicant(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert applicant(s) street/post office address ]

[ insert city, state, and zip code ] 

Dear [ insert applicant last name(s) (Mr., Mrs., Ms.) ]:

Regarding your offer to purchase the above-referenced REO property, please be advised that:

 1. Your offer has been accepted. Please contact this office to discuss proceeding with the 

transaction.

 2. Another offer has been accepted, however, your offer is being held as a back-up offer.

 3. The property is reserved for exclusive purchase for no less than 30 days after listing by 

eligible Direct or Guaranteed program applicants and for sale or lease to nonprofit 

organizations or public bodies providing transitional and turnkey housing for tenants 

of such transitional housing. Your offer will be considered after this period if no

acceptable offer from one of these reserved parties is received.

 4. Your offer could not be accepted for the following reason(s):

 Less than the listed sale price.

 An offer from a program applicant has been accepted.

 Another offer has already been accepted.

 The property is no longer forsale.

 (For back-up offers) The prior offer has been accepted.

 5. The property has been withdrawn from sale.

 6. A previous offer has been canceled. The property has been relisted for sale.

 7. The property has been relisted for sale at the following: 

Price $ 

Terms: 

 8. Other: 

Please feel free to contact this office if you have any questions regarding this letter. Thank you for your 

interest in purchasing REO property.

Sincerely,

[ insert name of Loan Approval Official ] 

[ insert title of Loan Approval Official ]

(01-23-03) SPECIAL PN

Revised (06-24-22) PN 563
HB-1-3550

Handbook Letter 11 (3550)

REFERENCE: Field Office Handbook Chapter 3 

SUBJECT: Request Information

Date: [ insert today’s date ] 

[ insert applicant(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert applicant(s) street/post office address ]

[ insert city, state, and zip code ] 

Dear [ insert applicant last name(s) (Mr., Mrs., Ms.) ]:

The following information must be submitted to this office in order for Rural Development to continue 

processing your application:

This letter is to advise you that no action can be taken until all the above items have been received in this 

office. Your application will remain in an inactive status until the information is received. Your failure to 

provide all the above items by , will result in the withdrawal of your 

application. If your incomplete application is withdrawn, you may appeal the withdrawal (see 

https://www.usda.gov/oha/nad/appeals for instructions on filing an appeal) or you can reapply.

Please be advised that Rural Development has a homeownership education requirement for first-time 

homebuyers. If you are a first-time homebuyer, you will be required to provide documentation of 

completion of an acceptable homeownership education course. Documentation must be in the form of a 

certificate of completion or letter from the provider of the homeownership education. Our office can 

assist you in locating an acceptable provider. We strongly encourage that applicants take the training 

early in the process.

(01-23-03) SPECIAL PN

Revised (06-02-23) PN 583
HB-1-3550

Handbook Letter 11 (3550)

Page 2 

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit 

applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the 

applicant has the capacity to enter into a binding contract); because all or part of the applicant’s income 

derives from any public assistance program; or because the applicant has in good faith exercised any right 

under the Consumer Credit Protection Act. The federal agency that administers compliance with this law 

concerning this creditor is the Federal Trade Commission. If a person believes he or she was denied 

assistance in violation of this law, they should contact the Federal Trade Commission, Washington, D.C. 

20580.

The Fair Housing Act prohibits discrimination in real estate related transactions, or in the terms or 

conditions of such a transaction, because of race, color, religion, sex, disability, familial status, or national 

origin. The federal agency that is responsible for enforcing this law is the U. S. Department of Housing 

and Urban Development. If a person believes that they have been discriminated against in violation of 

this law, they should contact the U. S. Department of Housing and Urban Development, Washington,

D.C. 20410 or call (800) 669-9777.

Sincerely,

[ insert name of Rural Development Official ] 

[ insert title of Rural Development Official ]
HB-1-3550

Handbook Letter 12 (3550)

REFERENCE: Field Office Handbook Chapter 12

SUBJECT: Notification of Approval (504 Grant and/or Loan)

[ insert applicant(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert applicant(s) street/post office address ]

[ insert city, state, and zip code ] 

Dear [ insert applicant last name(s) (Mr., Mrs., Ms.) ]:

Rural Development has approved your request for assistance as follows:

Approval of Section 504 Repair Loan assistance in the amount of [$ insert loan amount] at a fixed 1.0% 

interest rate.

Approval of Section 504 Repair Grant assistance in the amount of [$ insert grant amount].

If the amount(s) listed above are less than the amount requested, you may contribute the difference from 

other sources of funds, reduce the repair amount by negotiating with your contractor(s), or appeal the 

determination. The loan (grant) will be closed and secured only through the following instrument(s):

Promissory Note Only Grant Agreement

REPAYMENT TERMS: The loan will be repaid in monthly installments of principal and interest over a 20

year period, with the first installment due approximately 30 days after the last loan advance or acceptance 

of the repair work, whichever is earlier.

t

ADDITIONAL ITEMS OR CONDITIONS REQUIRED BY CLOSING: All items checked below

apply.

Attached list of repairs is to be completed, an escrow in the amount of $ will be held until the 

work is satisfactorily completed. RHS will fully disburse the loan/grant proceeds upon completion of the 

rehabilitation, subject to the homeowner’s written statement of satisfaction.

Documents: Any document used to verify employment, income, and assets that is over 120 days old, as 

of the date of closing will need to be updated prior to settlement.

Other:

Approval Official: Date: 

Note: Date of approval will be the same as date of obligation.

This loan (grant) is approved subject to the availability of funds and other conditions required by RHS. If 

you have any questions, contact the approval official whose name appears above at . 

(01-23-03) SPECIAL PN

Revised (06-02-23) PN 583
HB-1-3550

Handbook Letter 15 (3550)

REFERENCE: Field Office Handbook Chapter 1 

SUBJECT: Standardized Adverse Decision Letter

Date: [ insert today’s date ] 

[ insert applicant(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert applicant(s) street/post office address ]

[ insert city, state, and zip code ] 

Dear [ insert applicant last name(s) (Mr., Mrs., Ms.) ]:

Thank you for the opportunity to consider your request for Rural Development assistance. In reviewing 

your request, we considered all information submitted to the Agency and the regulations that govern the 

assistance for which you applied. After careful review, we regret to inform you that we were unable to 

take favorable action on your request. The specific reasons for our decision are as follows:

(The following items should be included in each adverse decision letter and can be presented in different 

formats depending upon the type of assistance requested and reasons for denial):

• Specific reasons for the decision;

• Regulatory basis (CFR citation) for the decision;

• If applicable, a statement of any evidence considered in making the decision such as credit 

reports, financial statements, etc.;

• If applicable, a statement of any issues presented by the customer such as those discussed during 

any meetings or phone conversations.

If one of the above reasons included an unacceptable credit history, please note that a tri-merge credit 

report on you was obtained from Equifax Mortgage Solutions, 4300 Westown Parkway, Suite 200, West 

Des Moines, IA 50266; telephone (800) 333-0037. You may obtain a free copy of your credit report from 

Equifax and dispute the accuracy or completeness of the report directly to Equifax. While the report was 

provided by Equifax, the decision to deny your request for assistance was made by this Agency and not 

Equifax.

(01-23-03) SPECIAL PN

Revised (11-18-22) PN 571
HB-1-3550

Handbook Letter 15 (3550)

Page 2 

If you believe our decision is incorrect, or the facts used in this case are in error, you may challenge our 

decision. Please see the attached document.

Sincerely,

[ insert name of Loan Approval Official ] 

[ insert title of Loan Approval Official ] 

Attachment [ insert Attachment 1-B or 1-C, as appropriate from Chapter 1 ] 
HB-1-3550

Handbook Letter 16 A (3550)

REFERENCE: Field Office Handbook Chapter 4 

SUBJECT: Eligibility of Self-Help Applicants- New Construction or Acquisition Rehabilitation 

Date: [ insert today’s date ] 

[ insert applicant(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert applicant(s) street/post office address ]

[ insert city, state, and zip code ] 

Dear [ insert applicant last name(s) (Mr., Mrs., Ms.) ]:

You have been determined eligible for Rural Housing Service (RHS) financing for {INSERTCONSTRUCTION, OR ACQUISITION REHABILITATION} of a modest single family home under the

Self-Help program. Eligibility is based on income and financial information that is verified within 180 

days of loan approval and closing. Loan approval and closing are subject to the continued eligibility of

the applicant and the availability of loan funds. Changes in your financial status (income and expenses) 

must be reported to RHS, and may affect your eligibility and the amount of loan for which you qualify. 

RHS has determined that you qualify for a Self-Help loan up to the amount of $ in_________

County, based on a down payment of $_________, estimated 

annual real estate taxes of $__________________ and insurance of $___________________. 

Funding Source Funding Amount Term (Yrs.) Interest Rate

1. RHS

2.

3.

4.

TOTAL FUNDING AMOUNT:

• The RHS interest rate noted above is the full note rate in effect as of the date of this notification. 

• The RHS interest rate is not locked in and is subject to change on the 1st of each month until 

locked at the lower rate in effect at the time of the loan approval (as evidenced by issuance of 

Form RD 3550-7, Funding Commitment and Notification of Loan Closing), or closing.

• You may be eligible for a subsidy that reduces the interest rate charged against the RHS loan. 

This payment subsidy is not a grant and is subject to recapture.

Subject to completion of homeownership education - Yes __ No __

(01-23-03) SPECIAL PN

Added (02-09-24) PN 606
HB-1-3550

Handbook Letter 16A (3550)

Page 2 

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit 

applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the 

applicant has the capacity to enter into a binding contract); because all or part of the applicant’s income 

derives from any public assistance program; or because the applicant has in good faith exercised any right 

under the Consumer Credit Protection Act. The federal agency that administers compliance with this law 

concerning this creditor is the Federal Trade Commission. If a person believes he or she was denied 

assistance in violation of this law, they should contact the Federal Trade Commission, Washington, D.C. 

20580.

The Fair Housing Act prohibits discrimination in real estate related transactions, or in the terms or 

conditions of such a transaction, because of race, color, religion, sex, disability, familial status, or national 

origin. The federal agency that is responsible for enforcing this law is the U. S. Department of Housing 

and Urban Development. If a person believes that they have been discriminated against in violation of 

this law, they should contact the U. S. Department of Housing and Urban Development, Washington, D.C. 

20410 or call (800) 669-9777.

Sincerely,

[ insert name of Loan Approval Official ] 

[ insert title of Loan Approval Official ]
HB-1-3550

Handbook Letter 16 B (3550)

REFERENCE: Field Office Handbook Chapter 4 

SUBJECT: Eligibility of Self-Help Applicants-Owner Occupant Rehabilitation 

Date: [ insert today’s date ] 

[ insert applicant(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert applicant(s) street/post office address ]

[ insert city, state, and zip code ] 

Dear [ insert applicant last name(s) (Mr., Mrs., Ms.) ]:

You have been determined eligible for Rural Housing Service (RHS) financing for owner occupant

rehabilitation of a modest single family home under the Self-Help program. Eligibility is based on

income and financial information that is verified within{INSERT 120 OR 180 AS APPLICABLE}

days of approval and closing. {INSERT LOAN, LOAN GRANT COMBO, OR GRANT} approval 

and closing are subject to the continued eligibility of the applicant and the availability of funds.

Changes in your financial status (income and expenses) must be reported to RHS, and may affect your 

eligibility and the amount for which you qualify. RHS has determined that you qualify for a Self-Help 

{INSERT LOAN, LOAN GRANT COMBO, OR GRANT} in_________ County, up to the amount of 

$_________loan and $__________grant. 

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit 

applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the 

applicant has the capacity to enter into a binding contract); because all or part of the applicant’s income 

derives from any public assistance program; or because the applicant has in good faith exercised any right 

under the Consumer Credit Protection Act. The federal agency that administers compliance with this law 

concerning this creditor is the Federal Trade Commission. If a person believes he or she was denied 

assistance in violation of this law, they should contact the Federal Trade Commission, Washington, D.C. 

20580.

The Fair Housing Act prohibits discrimination in real estate related transactions, or in the terms or 

conditions of such a transaction, because of race, color, religion, sex, disability, familial status, or national 

origin. The federal agency that is responsible for enforcing this law is the U. S. Department of Housing 

and Urban Development. If a person believes that they have been discriminated against in violation of 

this law, they should contact the U. S. Department of Housing and Urban Development, Washington, D.C. 

20410 or call (800) 669-9777.

Sincerely,

[ insert name of Loan Approval Official ] 

[ insert title of Loan Approval Official ]

(01-23-03) SPECIAL PN

Added (02-09-24) PN 606
HB-1-3550

Handbook Letter 17 (3550)

REFERENCE: Field Office Handbook Chapter 5 

SUBJECT: Adverse Decision Involving an Appraisal

Date: [ insert today’s date ] 

[ insert applicant(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert applicant(s) street/post office address ]

[ insert city, state, and zip code ] 

Dear [ insert applicant(s) last name(s) (Mr., Mrs., Ms.) ]:

After carefully analyzing the appraisal of the property located at , 

we are unable to take favorable action on your request for Rural Development services. The specific 

reasons for our decision are:

[insert the specific reasons associated with the appraisal for the adverse action]

If the aforementioned reason for denial was because the requested loan amount was greater than 

the appraised value, you may want to look into the following options:

1) Adjust the sales contract price.

2) If the sales contract falls through, a new Form RD 1944-59, Certificate of Eligibility, good for 

120 days, may be issued by contacting your Local Office.

3) Dispute the appraisal by presenting any new, objective information regarding the subject property, 

for the Agency’s consideration (e.g., incorrect or incomplete information was used for square 

footage, number of bedrooms, number of bathrooms, garage size, upgrades, repaired or renovated 

conditions, etc.). Comparable sales which are different from those used in the appraisal will not be 

considered.

You should inform the Local Office of which option you will exercise, and present any new information 

for our consideration, within 15 days from the date of this letter. Please submit the information in writing 

to the Local Office at [insert office address and office email resource account, if applicable.] If you have 

any other questions concerning this decision, you may contact the Local Office at [insert office phone 

number, address, and office email resource account, if applicable] to request a meeting with this office 

within 15 days from the date of this letter. You may also bring a representative or legal counsel with you.

If additional information is submitted to dispute the appraisal, Rural Development will perform a 

Technical Appraisal Review. The results of that review will be provided to you in writing, once 

completed.

(01-23-03) SPECIAL PN

Revised (06-02-23) PN 583
HB-1-3550

Handbook Letter 17 (3550)

Page 2 

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit 

applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the 

applicant has the capacity to enter into a binding contract); because all or part of the applicant’s income 

derives from any public assistance program; or because the applicant has in good faith exercised any right 

under the Consumer Credit Protection Act. The federal agency that administers compliance with this law 

concerning this creditor is the Federal Trade Commission. If a person believes he or she was denied 

assistance in violation of this law, they should contact the Federal Trade Commission, Washington, D.C. 

20580.

The Fair Housing Act prohibits discrimination in real estate related transactions, or in the terms or 

conditions of such a transaction, because of race, color, religion, sex, disability, familial status, or national 

origin. The federal agency that is responsible for enforcing this law is the U. S. Department of Housing 

and Urban Development. If a person believes that they have been discriminated against in violation of 

this law, they should contact the U. S. Department of Housing and Urban Development, Washington,

D.C. 20410 or call (800) 669-9777.

Sincerely,

[insert name of Loan Approval Official] 

[insert title of Loan Approval Official]
HB-1-3550

Handbook Letter 18 (3550)

REFERENCE: Field Office Handbook Chapter 5 

SUBJECT: Unfavorable Decision After Technical Review of an Appraisal 

Report

Date: [insert today’s date ] 

[insert applicant(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[insert applicant(s) street/post office address ]

[insert city,state, and zip code ] 

Dear [ insert applicant last name(s) (Mr., Mrs., Ms.) ]:

At your request, a Technical Appraisal Review has been completed by Rural Development appraisal staff, 

for the property you wish to purchase at [insert address from appraisal report]. As a result of this review 

we have determined the Appraisal Report and its value estimate are acceptable, as required by Rural 

Development regulations and appraisal industry standards.

As a result of this determination, we are unable to take favorable action on your loan request. The 

specific reason(s) for our decision are:

[Insert “The loan amount requested is not supported by the appraised value of the property” and/or 

any other specific reason associated with the appraisal for the adverse action.]

The determination that the Appraisal Report is acceptable is not appealable in accordance with 7 CFR 

Section 1900.53(c). However, you may consider the following options:

1. Adjust the sales contract price.

2. If the sales contract falls through, a new Form RD 1944-59, Certificate of Eligibility, good for 

120 days, may be issued by contacting your Local Office.

3. Seek mediation and/or request a hearing with National Appeals Division (NAD) regarding the 

Agency’s determination that the loan amount requested is not supported by the appraised value of 

the property (i.e., inadequate security). See Attachment 1-B, An Appealable Adverse Decision.

You should inform the Local Office if you intend to exercise option 1 or 2 within 15 days from the date of 

this letter. See Attachment 1-B for instructions and specific timeframes for requesting mediation or appeal 

(option 3). [Include Attachment 1-B from Chapter 1]

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants 

on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the 

capacity to enter into a binding contract); because all or part of the applicant’s income derives from any 

public assistance program; or because the applicant has in good faith exercised any right under the 

Consumer Credit Protection Act. The federal agency that administers compliance with thislaw concerning 

this creditor is the Federal Trade Commission. If a person believes he or she was denied assistance in 

violation of this law, they should contact the Federal Trade Commission, Washington, D.C. 20580.

 (01-23-03) SPECIAL PN

 Revised (06-02-23) PN 583
HB-1-3550

Handbook Letter 18 (3550)

Page 2 

The Fair Housing Act prohibits discrimination in real estate related transactions, or in the terms or 

conditions ofsuch a transaction, because of race, color, religion, sex, disability, familial status, or national 

origin. The federal agency that is responsible for enforcing this law is the U. S. Department of Housing 

and Urban Development. If a person believes that they have been discriminated against in violation of 

this law, they should contact the U. S. Department of Housing and Urban Development, Washington,

D.C. 20410 or call (800) 669-9777.

Sincerely,

[insert name of Loan Approval Official] 

[insert title of Loan Approval Official]
HB-1-3550

Handbook Letter 19 (3550)

REFERENCE: Field Office Handbook Chapter 3 

SUBJECT: Pre-qualification Review

Date: [ insert today’s date ] 

[ insert applicant(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert applicant(s) street/post office address ]

[ insert city, state, and zip code ] 

Dear [ insert applicant(s) last name(s) (Mr., Mrs., Ms.) ]:

Rural Development has conducted a pre-qualification review using a profile credit report (obtained at no 

cost to you) as well as unverified information you provided either orally or in writing. During this 

informal and unbinding review, items that raised concerns or need clarification were noted.

To qualify for program assistance, applicants must meet basic eligibility requirements that include, but are 

not limited to, acceptable credit history and loan repayment ability. We would like the opportunity to 

discuss with you the information obtained through the pre-qualification review. We ask that you call our 

office at [insert office phone number] within 15 days of the date on this letter.

You are welcome to submit a Uniform Residential Loan Application regardless of the issues discussed 

during the phone conversation.

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit 

applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the 

applicant has the capacity to enter into a binding contract); because all or part of the applicant’s income 

derives from any public assistance program; or because the applicant has in good faith exercised any right 

under the Consumer Credit Protection Act. The federal agency that administers compliance with this law 

concerning this creditor is the Federal Trade Commission. If a person believes he or she was denied 

assistance in violation of this law, they should contact the Federal Trade Commission, Washington, D.C. 

20580.

(01-23-03) SPECIAL PN

Revised (04-27-16) PN 485
HB-1-3550

Handbook Letter 19 (3550)

Page 2 

The Fair Housing Act prohibits discrimination in real estate related transactions, or in the terms or 

conditions of such a transaction, because of race, color, religion, sex, disability, familial status, or national 

origin. The federal agency that is responsible for enforcing this law is the U. S. Department of Housing 

and Urban Development. If a person believes that they have been discriminated against in violation of 

this law, they should contact the U. S. Department of Housing and Urban Development, Washington,

D.C. 20410 or call (800) 669-9777.

Sincerely,

[insert name of Loan Approval Official] 

[insert title of Loan Approval Official]
HB-1-3550

Handbook Letter 20 (3550)

REFERENCE: Field Office Handbook Chapter 13

SUBJECT: Response to Request to Sale for Less Than the Debt

Date: [insert today’s date]

[ insert borrower(s) first/mi/last name(s) (Mr., Mrs., Ms.) ] 

[ insert borrower(s) street/post office address ]

[ insert city, state, and zip code ] 

RE: [ Type of Assistance

Requested ] [ insert account # ] 

[ Residential Real Estate Located at (Popular Street Address of Property) ] 

Dear [ insert borrower last name(s) (Mr., Mrs., Ms.) ]:

USDA Rural Development has reviewed your request for consent to allow you to sell the subject 

property for the sale price that you have proposed. USDA Rural Development consents to this sale and 

agrees to release its first mortgage lien upon receipt of net proceeds from the sale in an amount not less 

than

$ . By approving this sale, the Agency is agreeing only to release its lien; 

however, you will remain obligated for repayment of any remaining debt. The remaining debt can be 

settled through the debt settlement process. For your convenience a Debt Settlement Application is 

enclosed for you to complete and return to the Servicing and Asset Management Office as instructed 

in the application.

- or - 

USDA Rural Development has reviewed your request for consent to allow you to sell the subject 

property for the sale price that you have proposed and does not consent to this sale for the following 

reasons: [insert specific reasons]. Please contact the local field office at the above location for 

additional information.

Sincerely,

[ insert name of RD Official ] 

[ insert title of RD Official ]

(01-23-03) SPECIAL PN

Revised (04-15-21) PN 549