FORM RD 2006-46 (Rev. 01-98)

U.S. DEPARTMENT OF AGRICULTURE MANUAL ISSUE No.

RURAL DEVELOPMENT WSAL PN 573

Washington, D.C 20250 DATE

January 9, 2023 

PROCEDURE NOTICE

RD MANUAL CHANGES

INSERT RD INS 440.1 INTEREST RATES, AMORTIZATION, 

(WSAL) GUARANTEE FEE, ANNUAL CHARGE, AND 

FIXED PERIOD. This Instruction is 

partially revised as follows:

Exhibit B is partially revised to update the Treasury Judgement rate and the 

effective date of January 1, 2023. 

REMOVE

Exhibit B: Pages 1 & 2 (Rev 37). 

INSERT RD INS 1951-O 

(WSAL) 

INSERT

Exhibit B: Pages 1 & 2 (Rev 38).

SERVICING CASES WHERE UNAUTHORIZED LOAN(S) 

OR OTHER FINANCIAL ASSISTANCE WAS 

RECEIVEDCOMMUNITY AND INSURED BUSINESS 

PROGRAMS. Exhibit B is partially revised to update program interest rates, 

effective January 1, 2023. 

REMOVE INSERT

Exhibit B: Page 4. Exhibit B: Page 4. 

RD HANDBOOK CHANGES 

INSERT RD HB-1-3555 SFH GUARANTEED LOAN PROGRAM TECHNICAL 

(WSAL) HANDBOOK. This Handbook is partially revised. 

Specific revisions include: 

Chapter 9: 

The following updates were made to HB-1-3555, Chapter 9 to incorporate program 

updates which allow greater flexibility for reviewing non-recurring asset deposits, 

provide additional guidance on calculating income, and update links, guidance for 

entering data into GUS, and making minor grammatical and formatting edits.

Paragraph 9.3 – Annual Income

- Clarified that lenders must verify the income of each adult household member for

the previous 2 years, which is consistent with 7 CFR 3555.

-Clarified under “full income documentation”, the lender must obtain W-2s or IRS

Wage and Income transcripts, in addition to paystubs.

- Changed the term “streamlined documentation” to “alternative income

documentation” to remove confusion with the streamlined refinance product.

(CON)

READ PROCEDURE - DISCUSS IN STAFF CONFERENCE - KEEP PROCEDURE MANUAL UP TO DATE
Page 2 ISSUED: PN 573

January 9, 2023

RD HANDBOOK CHANGES

INSERT RD HB-1-3555 

- Under “self-employed income documentation”, clarified that if ownership interest

is less than 25%, neither the “Business Owner” or “Self-Employed” options should be

selected in GUS.

- Clarified the Verbal Verification of Employment must be obtained within 10

business days of loan closing and confirmation a self-employment business remains

operational must be obtained within 30 days of loan closing.

- Restructured guidance on tax transcripts to emphasize a failure to timely file

tax returns is not an eligible explanation to forgo obtaining tax transcripts.

Paragraph 9.6 – Agency Review of Household Income

- Clarified the definition of manually underwritten loans for consistency

throughout the chapter.

- Clarified that the Agency’s review worksheet will be uploaded to the Electronic

Customer File (ECF).

Paragraph 9.8 – Stable and Dependable Income

- Included additional guidance on gaps in employment and clarified it is the

lender’s responsibility to determine if the income is stable and dependable.

- Clarified a business loss from a closed business may be removed from

consideration under the same circumstances that self-employment income from a

closed business can be removed from consideration.

Paragraph 9.9 – Agency Review of Repayment Income

- Clarified the definition of manually underwritten loans for consistency

throughout the chapter.

- Clarified that the Agency’s review worksheet will be uploaded to the Electronic

Customer File (ECF).

Attachment 9-A – Income and Documentation Matrix

- Updated GUS data entry guidance throughout the matrix.

- Added additional considerations to the “Considerations for All Income

Calculations” section of the matrix to provide important reminders regarding

reviewing/calculating income.

- Revised “Automobile Allowance” guidance to allow the full expense allowance to be

included as income and the full debt counted in DTI.

- Clarified that “Boarder Income” refers to rental income received from an

individual renting space inside the dwelling.

(CON)
Page 3 ISSUED: PN 573 

January 9, 2023 

RD HANDBOOK CHANGES

INSERT RD HB-1-3555 

- Revised “Bonus” income to reflect the one-year history must be in the same or

similar line of work.

- Revised the “Child Support” guidelines to simplify the guidance and remove

inconsistencies within the current guidance.

- Clarified that employer-provided fringe benefits that are reported as taxable

income may be included in repayment income.

- Revised the “Expense Allowance” guidance to allow the full expense allowance to

be included as income and the full debt counted in DTI.

- Added a category providing guidance on “Guardianship/Conservatorship Income.”

- Added a category providing guidance on “Individual Retirement Account (IRA)

Distributions.”

- Simplified the guidance on considering mileage deductions.

- Removed requirement to obtain a copy of the IRS W-4 document when using a

Mortgage Credit Certificate as income.

Removed “Non-Occupant Borrower” category as non-occupant borrowers are not 

permitted.

- Revised “Overtime” income to reflect the one-year history must be in the same or

similar line of work.

- Updated “Rental Income” guidelines regarding corresponding mortgage liabilities

to be consistent with the guidance in Chapter 11.

- Revised “Secondary Employment” guidance to clarify that the applicant must have a

one-year history of working both jobs concurrently to be considered for repayment

income.

- Revised the guidelines for “Section 8 Housing Vouchers.”

- Revised the “Separate Maintenance/Alimony” guidelines to simplify the guidance

and remove inconsistencies within the current guidance.

- Revised the “Unreimbursed Employee or Business Expenses” guidance to reflect

instances where the IRS continues to allow these deductions.

- Added a category providing guidance on “Variable Income.”

- In the “Assets and Reserves” portion of the matrix, reiterated that lenders have

the option to underwrite to the most conservative approach, with no consideration

of assets entered into GUS.

(CON)
Page 4 ISSUED: PN 573 

January 9, 2023 

RD HANDBOOK CHANGES

INSERT RD HB-1-3555 

- Revised guidance for sourcing deposits in depository accounts.

- Clarified that gift funds need to be sourced, via the donor’s bank statement,

when the funds are sent directly to the settlement agent.

- Clarified that gift funds applied as Earnest Money should not be entered on the

“Loan and Property Information” GUS application page.

- Added a category providing guidance on “Lump Sum Additions.”

- Clarified in the “Retirement” section that funds borrowed against retirement

accounts (e.g. 401(k), IRA, etc.) are eligible for funds to close, but are not

considered in reserves.

Attachment 9-E – Information for Analyzing Tax Returns for Self-Employed Applicants

- Revised guidance on “Capital Gain or Loss” to reflect a two year history to be

consistent with the guidance in Attachment 9-A.

Chapter 15: 

The following updates were made to HB-1-3555, Chapter 15 to make minor grammatical 

and formatting changes, correct discrepancies, and provide clarification for easier 

understanding of guidance.

Paragraph 15.1 – Introduction

- Updated to state that the agency requires lenders to use GUS.

Paragraph 15.3 B - Guaranteed Underwriting System GUS Accept Loans

- Revised paragraph to refer to the mandatory use of GUS.

Paragraph 15.7 C - Requesting Changes in Conditions

- Clarified that requests should be made via email.

Attachment 15-A

- In Lender Instructions, updated electronic delivery to Rural Development is the

preferred method for submission.

- On page one, removed evidence of qualified alien requirements, as it is not

required for submission on accept files.

(CON)
Page 5 ISSUED: PN 573 

January 9, 2023 

RD HANDBOOK CHANGES

INSERT RD HB-1-3555 

- On page two, under Income verification Documentation, replaced the term

Streamlined with Alternative Documentation.

- Under Verification of Rent, clarified it is applicable for manually underwritten

loans with credit scores less than 680.

- On page 3, under Underwriting Analysis, clarified the documentation of income

calculations.

REMOVE INSERT

Chapter 9 dated 03-09-16: Chapter 9 dated 03-09-16: 

Pages 9-1 thru 9-11, Pages 9-1 thru 9-12 revised, 

 Attachments 9-A thru 9-C and, Attachments 9-A thru 9-C and

9-E & 9-F; 9-E & 9-F revised;

Chapter 15 dated 03-09-16: Chapter 15 dated 03-09-16: 

Pages 15-1 thru 15-6, Pages 15-1 thru 15-6 revised, 

 Attachment 15-A. Attachment 15-A revised 01-09-23.

oOo