USDA is an equal opportunity lender, provider, and employer. 

Rural Development

Joaquin Altoro

Administrator

Rural Housing Service

1400 Independence Ave, SW 

Room 5011-S

Washington, D.C. 20250

TO: State Directors 

Rural Development

ATTN: All Single Family Housing Direct 

State and Field Employees

Telephone: (202) 720-1494 FROM: Joaquin Altoro 

Administrator 

Rural Housing Service

SUBJECT: Temporary Authorization 

 SFH Direct - Approval Authority Guidelines 

PURPOSE:

This memorandum announces a temporary authorization for the State Director to 

grant conditional approval authority related to the SFH Direct Programs’ Approval 

Authority Guidelines in Handbook-1-3550, Appendix 11. 

This temporary authorization is effective as of the date of this memorandum; and 

will remain in effect until this memorandum’s stated expiration date or until revoked 

via a separate memorandum (whichever occurs first).

BACKGROUND:

Increased regular and special funding and programs, such as the American Rescue 

Plan Act (ARPA), Housing Preservation Grants (HPG), disaster assistance, etc. in 

Fiscal Years (FY) 2021, 2022, and 2023 have increased application backlogs in some 

states. Among other actions to address the backlog, the Agency deployed a Surge 

Support Team in FY 22 to focus on reducing the number of applications awaiting an 

eligibility review; issued temporary authorities to provide additional flexibility in 

processing; and implemented a number of HB-1-3550 changes to streamline 

processes.

EXPIRATION DATE: FILING INSTRUCTIONS:

February 28, 2024 Housing Programs
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Due to the limited number of Loan Approval Officials in some states, lack of certain housing 

types (e.g., new construction, purchase new) needed for completing the required number of file 

reviews, and/or time constraints of supervisors and those responsible for completing file reviews, 

the Agency has determined that the current requirements are prohibitive to the Government’s 

interest in reducing the application backlog, and flexibilities must be provided at this time. 

IMPLEMENTATION RESPONSIBILITIES:

When the SFH Specialist has completed all of the Direct University Learning Modules & 

Quizzes and taken the Final Assessment as identified in HB-1-3550, Appendix 11, the State 

Director may grant conditional approval authority as follows:

• Upon submittal of three closed 502 files of any type (e.g., existing, existing with 

repairs, new construction, purchase new), conditional loan approval authority for 

Section 502 may be granted subject to the remaining file reviews to be completed when 

the next applicable file type (as required in Appendix 11) is available for each of them. 

For example, if a Specialist submits three closed files that are a combination of 

purchase existing (no repairs) and purchase existing with repairs, conditional authority 

may be granted to approve purchase existing (with or without repairs), with the

condition that the next new construction available be submitted for review before being 

permitted to approve new constructions.

• Upon submittal of two closed 504 files of any type (e.g., grant-only, loan-only, combo), 

conditional approval authority for Section 504 loans and grants may be granted subject 

to the remaining file reviews to be completed when the next applicable file type (as 

required in Appendix 11) is available for each of them. 

• The SFH Specialist will still be required to seek supervisor approval before a decision 

can be officially rendered on the loan and/or grant, they do not have the authority to 

sign themselves.

• Allow State Directors the discretion to substitute a new construction loan, with an existing 

home with repairs if a construction contract is needed. This may only be granted if there is 

a lack of new construction in the State.

• Allow State Directors the discretion to waive the field review requirement in Appendix 

11, Item IV. if the State Director has otherwise determined that the SFH Specialist is 

proficient in inspections and site approval. 

• Allow State Directors the discretion to relax the three-month cap for two separate file 

submissions to lessen the burden on staff reviewing files. 

• The Further Delegation of Authority letter in Appendix 11 may be modified as necessary 

to reflect the conditional loan approval authority being granted based on the specific file 

types completed by the SFH Specialist. The State Office will monitor the progress of the 
USDA is an equal opportunity lender, provider, and employer. 

SFH Specialist with regards to the remaining file reviews to be completed. A fully 

executed Further Delegation of Authority letter must be re-issued once the SFH Specialist 

has completed all the requirements in Appendix 11. 

Unless specified above, the requirements in Appendix 11 must be followed when granting 

approval authority. For questions regarding this memorandum, please contact the SFH Direct 

Loan Division at sfhdirectprogram@usda.gov.