5.2.4 USDA Loans or Rural Housing Service

The United States Department of Agriculture (USDA) operates the Rural Housing Service, which provides single-family Direct and Guaranteed Loans under its directive to improve the economy and quality of life in rural America.

USDA is the lender and servicer for Direct Loans. Special servicing for Direct Loans include workout agreements, protective advances in which USDA pays taxes and insurance on behalf of borrower.

USDA Guaranteed Loans are guaranteed by the USDA against default by the borrower. USDA Guaranteed Loans will not be serviced by the USDA and will not necessarily be identifiable from the loan documents. Special loss mitigation options are available to borrowers with USDA Guaranteed Loans.1

• 1See U.S. Dep’t of Agric. Rural Dev., HB-1-3555, SFH Guaranteed Loan Program Technical Handbook ch. 18 (rev. Oct. 14, 2020).