Single Family Housing Guaranteed Loan Program (SFHGLP)

Updated 2026-05-17

The Single Family Housing Guaranteed Loan Program (SFHGLP) is a mortgage financing program administered by Rural Development (USDA), a mission area within the United States Department of Agriculture (USDA). It is designed to assist low and very low-income individuals in designated rural areas who are unable to obtain conventional financing.

Key Characteristics and Benefits

• 100% Loan-to-Value (LTV): SFHGLP loans often allow for 100% LTV, meaning borrowers may not need a down payment. This is a significant benefit for eligible borrowers.
• Closing Cost Inclusion: Closing costs may be rolled into the loan amount, further reducing upfront expenses for borrowers.
• Mortgage Guarantee: The United States Department of Agriculture (USDA) provides a mortgage guarantee to approved lenders against borrower default. This guarantee functions similarly to Homeowners Protection Act (HPA) and Mortgage Insurance (MI) by reducing the lender's risk, enabling them to offer more favorable terms.
• Target Audience: The program specifically targets individuals in rural areas who meet certain income eligibility requirements, often tied to low and very low-income thresholds.

Program Requirements

To qualify for an SFHGLP loan, borrowers typically must:

• Be unable to obtain sufficient credit from another source.
• Agree to personally occupy the dwelling.
• Meet specific income eligibility requirements for the area.
• Purchase a property located in a USDA-designated rural area.

Regulatory Oversight

Rural Development (USDA) is responsible for enforcing the provisions of the SFHGLP, as outlined in 7 CFR Part 3555. Non-compliance can lead to penalties for lenders, including reduction of loss claim payments or termination of program participation.

Loan Servicing and Sales

Lenders participating in the SFHGLP may sell these loans to other Agency-approved lenders, Government Sponsored Enterprise (GSE), Government Sponsored Enterprise (GSE), or the Federal Home Loan Banks (FHLBanks). When a loan is sold, the purchasing lender acquires all rights and assumes all obligations of the selling lender under the Loan Note Guarantee. Lenders must notify Rural Development immediately upon the sale or transfer of servicing of an SFHGLP loan.