Single Family Housing Guaranteed Loan Program

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Credit Analysis

Single Family Housing Guaranteed Loan Program
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Credit Analysis

• Where is the topic located? 

– 7 CFR Part 3555, paragraph 3555.151, 

Eligibility Requirements

• 7 CFR Part 3555

– HB-1-3555, Chapter 10, 

Credit Analysis 

• Handbooks | Rural Development (usda.gov)
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Credit Analysis

• Right off the bat. 

• If you are unfamiliar with 

USDA, your burning 

question is probably: 
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Credit Analysis

• What is USDA’s minimum Credit Score? 

• Short Answer: 

- USDA does not have a specific minimum 

Credit Score
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Credit Score for a GUS Accept? 

- Credit Analysis

• USDA does not use a single minimum credit score. 

• The Guaranteed Underwriting System (GUS) is a 

sophisticated automated system that analyzes the 

strengths & weaknesses in each file (including 

credit history, reserves, job history, etc.). 

• Based upon those strengths/weaknesses, and 

GUS’s ability to analyze them, there is no standard 

credit score minimum.
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Prudent Underwriting 

- Credit Analysis

 It is the lender’s responsibility to determine the 

creditworthiness of the applicant. 

 Lenders and investors may have overlays such 

as minimum credit score requirements.

 In some cases of adverse credit, the lender’s 

underwriter can grant credit exceptions.
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7 CFR Part 3555 - Credit Analysis

7 CFR Part 3555: 3555.151(i)

• Verifiable credit history • Demonstrate ability and willingness to 

meet debt obligations

• Acceptable/Verified credit score does not 

= automatic approval

• Draw logical conclusion regarding 

commitment to successfully handle 

financial obligations 

• GUS is only a tool to assist lenders to 

evaluate risk 
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Update – Mandatory use of GUS

- Credit Analysis 

• As of May 9, 2022, use of the GUS system is 

mandatory. 

• Only loans not supported by GUS (Streamlined Assist 

Refinances, Existing Manufactured Home Pilot 

Program, etc.) should continue to be submitted as in 

the past.

• Loans that receive “Refer” or “Refer with Caution” 

GUS recommendation can still be submitted to USDA 

as a “manually underwritten” loan by using GUS final 

submission. 

• All other loans must be submitted in GUS. 
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Credit Requirements and GUS

- Credit Analysis 

Credit requirements may vary for loans 

originated through GUS vs. those few files 

that will continue to be manually underwritten. 

Repeat: 

Credit requirements may vary for loans 

originated through GUS vs. those few files 

that will continue to be manually underwritten. 
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Non-Starters 

- Credit Analysis 

Will render an Applicant ineligible: 

• Presently delinquent on non-tax Federal debt

• Presently delinquent court ordered child support 

unless:

• Approved repayment agreement in place with 3 

timely payments made prior to loan closing –or-

• Arrearage is paid in full prior to loan closing –or-

• Release of Liability is (verified) and documented 

• Applicant does not have a clear “A” CAIVRS number

• SAM check shows suspended from Federal programs
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Credit Report Requirements 

- Credit Analysis 

Must be from a recognized credit 

repository that is not affiliated with the 

Lender. 

• Automated Merged Reports: 

• MMCR & TRMCR and

• RMCR

• GUS will not accept Experian 

“Boost” reports/scores. 
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Credit Report Requirements 

- Credit Analysis 

Must meet requirements of Fannie, Freddie, 

HUD or VA:

• No more than 120 days old at loan closing

• Accurate and complete

• Provide an account of the credit history and 

public record information for each applicant 

who is a party to the note; 
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Credit Report Requirements (cont’d)

- Credit Analysis 

Credit reports must also:

• Be an original document

• Have no whiteouts or alterations

• Have name/address of reporting agency

• Give primary repository from where info 

was pulled for each account

• Give name of who ordered report
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Credit Report Requirements 

- Credit Analysis 

• Lenders follow credit repository 

guidelines, lending laws, etc. to determine 

if joint applicants must have separate 

credit reports. 

• USDA does not require unmarried 

applicants to be on one credit report, loan 

application, Form RD 3555-21, etc. 

• Applicants must ensure credit data frozen 

at any credit repository is made available. 
Traditional conventional credit is defined for 

Agency purposes as an applicant that:

• Has personal non-retirement liquid asset funds 

of at least 20% (including equity from sale of 

current residence); and

• Can pay all closing costs (plus the 20% down) 

associated with the loan; and

• Meets qualifying ratios of no more than 28% 

PITI and 36% TD; and

Unable to Secure Conventional Credit

The “Test for Other Credit”

USDA requires that applicants must be unable to 

obtain traditional conventional mortgage credit, as 

defined by the Agency, for the subject loan.

• Demonstrates qualifying credit for such a loan; 

AND

• Conventional loan is 30-year fixed rate loan 

without PMI

• Lender and applicant certify applicant is not 

eligible for conventional credit by signing the 

3555-21
• Individuals who have been suspended 

or debarred from participation in 

Federal programs are not eligible for a 

guaranteed loan.

• The approved lender or their agent 

must screen the applicant and parties 

to the transaction on the SAM website: 

(www.SAM.gov)

Check SAM for Suspension or Debarment
• Once the lender has screened the 

applicant you must:

− Record date verified on 3555-21

− SAM must be checked within 30 

days of loan closing

Document you checked SAM

3555-21
• Verify applicant is not presently 

delinquent on a Federal debt

− Lender must verify through the 

Credit Alert Verification Reporting 

System (CAIVRS) 

− Access to CAIVRS provided on the 

“Additional Data” screen in GUS

− The presence of delinquent nontax Federal debt, child support, or 

previous USDA loss cannot be 

waived by the lender

Credit Eligibility Requirements

CAIVRS
GUS “Accept” Files

• No credit score validation required

GUS “Refer”, “Refer w/Caution”, and 

Manually Underwritten Files

• One applicant must have at least two

historical trade line references to validate 

score

• Accounts may be open, closed, or paid 

in full

• 12 month history (previous history ok)

Validating the Credit Score

• If there are no eligible 

tradelines on the credit 

report, non-traditional 

credit must be verified

• Eligible tradelines can include: revolving 

accounts, installment loans, credit cards, 

collections, and charge off accounts

• Ineligible tradelines include: Child support, 

alimony court ordered debt, and deferredpayment loans 
GUS “Accept” File 

• No verification of rent or mortgage required

GUS “Refer”, “Refer with Caution”, or Manually 

Underwritten Loan 

• May require a verification of rent or mortgage

− Refer to GUS Underwriting Findings Report

• If a full 12-month verification is not available, the 

lender may utilize the time period that is 

available.

Rent History

One rent 30 or more days 

late in the past 12 months 

is considered a significant 

derogatory credit and will 

require a credit exception 

from the lender’s 

approval official.
• The lender may develop a Non-Traditional 

Mortgage Credit Report (NTMCR)

• Two trade lines required for applicants with present 

housing expense (rent + 1)

• Three trade lines required for applicants without 

present housing expense

• When using Non-Traditional Credit, those 

Applicants are not eligible for Debt Ration Waiver. 

Obtaining Non-Traditional Credit History

• An applicant’s decision not to use 

traditional credit will not be used as 

a basis for rejection
• To be valid, each tradeline must have 

12 months of repayment history

• Traditional trade lines with a 12 

month history can be combined with 

eligible non-traditional trade lines

• Trade lines may be open, recently 

closed (6 months or less) and/or paid 

in full by the applicant

Obtaining Non-Traditional Credit History

Acceptable NTMCR 

forms of 

documentation:

• Cancelled checks

• 3rd party verification

• Non-traditional credit 

report
• Exceptions should only be for situations that are:

− Temporary in nature, beyond the applicant’s control, and due to the current 

employment/financial/health of the household are unlikely to reoccur. (i.e. 

temporary loss of job, illness, etc.)

• Lenders cannot grant exceptions for:

− Delinquent court ordered child support

− Delinquent federal non-tax debt

− Previous USDA loss

− Ineligible CAIVRS/SAM results

Credit Exceptions
 GUS “Accept” Files 

• Credit exceptions NOT required

 GUS “Refer”, “Refer w/Caution”, and Manually 

Underwritten Files 

• Credit exceptions required for:

 Foreclosures, Bankruptcies, Deeds-in-Lieu, and 

Short Sales that occurred within the past 36 

months

 One rent or mortgage payment that was 30 or 

more days late in the past 12 months 

Credit Exceptions
Collection Accounts

A credit exception is no longer required for 

collection accounts regardless of the GUS 

underwriting recommendation. 
• All open collections must be listed on the Asset and 

Liabilities GUS page, noted and marked accordingly.

• If the cumulative total of all non-medical collections

exceeds $2000, the lender must:

− Require payment in full of these accounts prior 

to closing, or

− Use an existing repayment agreement amount, 

or

− Include 5% of the outstanding balance

Collection Accounts

A credit exception is 

no longer required for 

collection accounts 

regardless of the GUS 

underwriting 

recommendation. 

But what about 

Repayment Ratios?
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https://www.rd.usda.gov/files/3555-1chapter10.pdf 

Chapter 10, Credit Analysis

Attachment 10-A, Credit 

Matrix

Provides guidance 

regarding agency’s 

requirements for credit 

documentation
Chapter 10: Attachment 10-A,

Credit Matrix

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Guaranteed

Knowledge

Credit Matrix - Pages 1-6 address:

• Pulling CAIVRS, 

• Credit Score Validation, 

• Credit Inquiry/Recent Debts/Undisclosed Debts, 

• Credit Exceptions, 

• Non-Traditional Credit, and 

• What to do after USDA’s Conditional Commitment is 

issued for: new or undisclosed debts or increased 

payments on existing debts. 
HB-1-3555

Chapter 10: Attachment 10-A,

Credit Matrix

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Guaranteed

Knowledge

• Authorized User Accounts

• Bankruptcies

• Charge-Offs

• Collections

• Debt Management Plans 

• Delinquent Court-Ordered 

Child Support

• Delinquent Federal Non-Tax Debt

• Owed Federal Taxes

• Disputed Accounts 

• Garnishments

• Non-Federal Judgments

• Non-Purchasing Spouse Debt

• Deeds-in-Lieu

• Foreclosures

• Short Sales

• Previous USDA Loss

• Rent/Mortgage Pmt History

Pages 7-17 address:
HB-1-3555 - Chapter 10: 

Attachment 10-A, Credit Matrix
HB-1-3555 - Chapter 10: 

Attachment 10-A, 

Credit Matrix
HB-1-3555 - Chapter 10: 

Attachment 10-A, 

Credit Matrix
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Review the 

“GUS Underwriting 

Findings Report” 

at the “View 

Findings” Tab 

GUS Underwriting Finding Report
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GUS Underwriting Findings Report

Refer and Refer 

with Caution 

Determination:

 Loan Risk 

Findings

 Lender’s 

Required 

Conditions
https://www.rd.usda.gov/resources/usda-linctraining-resource-library/loan-origination
Manual File Submissions

1 Input data into 

GUS

2 Upload 

documents to 

GUS 

3 Email 

Production 

Team
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Page 1

• GUS “Accept” o Purchase o Non-Streamlined 

Refinance

o Streamlined Refinance
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Page 2

• GUS “Refer” and “Refer with 

Caution”

• GUS “Accept” with “Full 

Documentation” Message

• Loans Underwritten Without 

the Assistance of the GUS

• Manufactured Housing Pilot 

Loans
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Page 3

• Streamlined-Assist 

Refinance o Enter application into GUS o Upload documents into 

GUS

o Email Production Team 

notifying them application 

is ready
One Quick Note on Income Documentation
Q: 

Since USDA’s Form 3555-21 no 

longer has space for income 

calculations, that means we no 

longer have to document this, 

correct? 

A: 

Incorrect. Lenders must still 

document Household Income on 

either Attachment 9-B, 

1008/1077, or the equivalent & 

retain in your permanent case 

file. 

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Do we have to document Household Income still? 
Scenarios
Let’s now look at some scenarios that 

you may run into. 

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SCENARIOS

Credit Analysis
You’re the underwriter. And the file currently being reviewed receives a GUS 

“Accept” recommendation. But you notice some risks and weaknesses in the file 

that really give you heartburn. 

Do you HAVE to approve the loan just because it got an Accept recommendation? 

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SCENARIO 1 – Underwriter must approve GUS Accept?

Credit Analysis
NO – You don’t.

• GUS does not issue loan approvals. 

• GUS only makes recommendations to Underwriters based on the data entered 

• Lenders are responsible for all final loan decisions 

• A GUS “Accept” underwriting recommendation does not indicate loan approval 

• 3555.107(b)(3), HB 5.3 

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ANSWER 1 - Underwriter must approve GUS Accept?

Credit Analysis
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SCENARIO 2 – Validate Credit Score

Credit Analysis

You have a file that gets a GUS “Refer” underwriting recommendation. The 

following apply to the file: 

• Auto Loan with 24 months reviewed (account closed 12 months ago)

• Visa: 13 months reviewed (account closed 24 months ago)

• MasterCard: 16 months reviewed (open)

• No rent verification 

• Credit score = 650

Do you have to obtain Non-Traditional tradelines because 2 of the 3 above are 

closed accounts? 
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ANSWER 2 – Validate Credit Score

Credit Analysis

No – You don’t. 

• Since there is no rental history to verify, at least 2 tradelines must be 

obtained. Check! 

• All of them have at least a 12 month history. Check! 

• Bottom line: the accounts used may be open, closed, and/or paid in 

full. 

• 3555.151(i)(3), HB Attachment 10-A: Credit Scores and Validation 
You have a Non-traditional credit borrower.

• The only VOR: 12 months duration, lease ended 8 months ago. Living with 

family now.

• Electric Bill: 18 month history 

• Cable Max Bill: 16 month history

Have USDA’s Non-traditional credit requirements been met? 

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SCENARIO 3 – Non-Traditional Credit

Credit Analysis
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ANSWER 3 – Non-Traditional Credit

Credit Analysis

No. They have not been met. 

• VOR was closed more than 6 months at time of loan application 

• Three non-traditional tradelines required, applicant needs one more 

(assuming electric bill and cable continue to be eligible) 

3555.151(i)(6), HB Attachment 10-A: Non-Traditional Credit 
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SCENARIO 4 - Judgment

Credit Analysis

You are the Loan Officer with a file that has a non-federal judgment of $1,850.

There is a documented repayment agreement of $100/month with 5 months of 

repayment verified and documented.

May the underwriter approve the loan without requiring this debt to be paid in full & still 

meet USDA guidelines?
Yes. This would be acceptable. 

• It is Non-federal judgment

• It has a repayment plan in place

• The minimum of 3 months payments met (5 made prior to date of loan application)

NOTE: Caution should be used when dealing with Judgments due to the possibility of them 

becoming Prior/First Liens. The lender is still responsible for perfecting and maintaining a first 

lien position. Also, confirm that the Declarations in GUS and on the application reflect the 

presence of a judgment. 

3555.151(i)(4), HB Attachment 10-A: Non-Federal Judgment 52

ANSWER 4 - Judgment

Credit Analysis
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SCENARIO 5 – Undisclosed Debt Found

Credit Analysis

The Underwriter is wrapping up a file that received a GUS “Accept” 

underwriting recommendation. 

• Middle Credit Score = 700

• An undisclosed debt has been found of $200/month that was not 

previously reported by the Applicant. 

• Conditional Commitment not yet issued 

Does the Underwriter have to downgrade the file to a “Refer” because 

of the new debt? 
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ANSWER 5 – Undisclosed Debt Found

Credit Analysis

No. They do not have to downgrade the file. 

• Lender must manually enter the debt on the Asset and Liabilities page

• No automatic downgrade is required

• GUS must be re-run to consider the new debt payment, which may change the 

underwriting recommendation. 

• 3555.151(i)(2), HB Attachment 10-A: 

Credit Inquiries/Recent Debts/Undisclosed Debts 
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SCENARIO 6 – Short Sale after Divorce

Credit Analysis

The Applicant’s divorce was final 10/2018. And:

• Applicant’s ex-spouse was awarded home, no refinance complete, late 

payments began 12/2019 

• Short Sale completed 6/2020

• Applicant is now applying for a guaranteed loan

Is the Short Sale adverse credit for the Applicant? 
No. It is not adverse credit. 

• Because the Mortgage was current at the time of divorce

– Documentation must be retained for support

– No credit exception is required

– Even though technically the Applicant was not release from liability by the 

creditor, this is acceptable in this type of situation. 

• 3555.151(i), HB Attachment 10-A: Short Sale 

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ANSWER 6 – Short Sale after Divorce

Credit Analysis
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SCENARIO 7 – Credit Exception

Credit Analysis

Your next file receives a GUS “Refer” underwriting recommendation. And:

• Chapter 7 bankruptcy discharged 30 months ago

• Applicant filed due to loss of job and major medical issues 

• Current job time: 2 years, 4 months 

• Rent: $1,100 for 2 years New PITI: $1,150 

• Ratios are low: 17/30 w/Reserves: 2 months

Could the Underwriter justify meeting USDA guidelines if they granted a credit waiver to 

the bankruptcy? 
YES. A credit waiver could be warranted in this case. 

• BK is less than 36 months discharged, but there are mitigating circumstances that meet HB 

requirements. A loss of job and medical issues are certainly cited as temporary in nature 

and beyond the control of the applicant. 

• There are also compensating factors to support the probable repayment of the mortgage, 

such as good current job time, reserves, new PITI is similar to current rent, etc. 

• Credit waiver would meet HB Attachment 10-A: Credit Exceptions 

• 3555.151(i)(3) and (4), HB Attachment 10-A: Credit Exceptions 

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ANSWER 7 – Credit Exception

Credit Analysis
Policy Updates
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Policy Updates – June 2022

 Mandatory use of GUS (except for loan types not supported by GUS)

 Homeowner Assistance Fund – FAQ’s

• Questions regarding the HAF program can be directed to USDA 

at guarantee.svc@usda.gov or (866) 550-5887.

 Eligibility updates for non-US citizens

 Began May 2nd: For a 12-month period, non-U.S. citizens with valid SSN and work 

authorization (ex: Form I-766-Employment Authorization Document) are temporarily eligible 

for assistance. When needed, there is a “Non U.S. Citizen Waiver Processing Guide” on the 

LINC Library under the “Loan Origination” tab.
Single Family Housing Guaranteed Loan Program

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Lender Resources
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HB-1-3555

https://www.rd.usda.gov/resources/regulations/program-regulations

7 CFR Part 3555

Bookmark It!

Use Ctrl-F to find 

answers quickly!
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HB-1-3555

HB-1-3555 SFH 

Guaranteed 

Loan Program 

Handbook

https://www.rd.usda.gov/resources/directives/handbooks
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Online Training Modules

LINC Training and Resources 

www.rd.usda.gov/page/usda-linc-training-resource-library

• Lender Training 

modules are 

available online 

for a variety of 

program topics 

• Training includes 

audio webcast 

and training 

slides that can be 

downloaded
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GovDelivery Updates

www.rd.usda.gov/page/usda-linc-training-resource-library

Stay up to date with 

all announcements 

regarding USDA’s 

Single Family Housing 

Guaranteed Loan 

Program by signing up 

for GovDelivery 

Updates
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Contact Us

General Program/Scenario Questions: sfhgld.program@usda.gov

Specific Loan Application Inquiries: 

SFHGLPONE@usda.gov

– AK, AL, AZ, CA, CO, GU, HI, IA, ID, KS, MT, NM, NV, OR, SD, TX, UT, WA, WI, WP, 

WV, WY

SFHGLPTWO@usda.gov

– AR, KY, LA, MN, MO, MS, ND, NE, NJ, NY, OK

SFHGLPTHREE@usda.gov

– CT, DE, GA, IL, MA, MD, ME, MI, NC, NH, RI, SC, VT, WV

SFHGLPFOUR@usda.gov

– FL, IN, OH, PA, PR, TN, VA, VI

Lender Training & Outreach: sfhgld.lenderpartner@usda.gov 

Lender Approval & Recertification: sfhgld.compliance@usda.gov

Loan Servicing: sfhglpservicing@usda.gov

Technical Support (GUS): rd.hd@stl.usda.gov

Technical Support (e-Authentication): eAuthHelpDesk@ftc.usda.gov

Loss Claims: guarantee.svc@stl.usda.gov

Monthly & Quarterly Status Reporting: rd.nfaoc.hsb@stl.usda.gov
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End Slide 

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