skip to main content
This is the start of the main content


Upcoming Revisions to USDA Insurance Deductibles

The Single-Family Housing Guaranteed Loan Program (SFHGLP) has recently announced upcoming revisions to the SFH Guaranteed Loan Program Technical Handbook (HB-1-3555). These changes are expected to be updated in the guide on May 6, 2024.


The key update pertains to the Insurance Policy Requirements outlined in Chapter 16 – Closing the Loan and Requesting the Guarantee. Here are the revised details:


Maximum Insurance Deductible:

  • The maximum deductible permitted for hazard insurance will be 5% of the total coverage amount.
  • For flood insurance, the maximum deductible will be $10,000.
  • Lenders must exercise caution when allowing a high deductible, ensuring that it is reasonable and won’t create undue financial hardship for the applicant.


Hazard Insurance Coverage:

  • Properties should have replacement cost coverage that is at least equal to the guaranteed value of the improvements or UPB (Unpaid Principal Balance).


We encourage all clients to review the announcement and revisions to the handbook in their entirety. You can find the draft of the changes here.


If Proctor provides tracking services for your entity, your relationship manager will reach out to discuss any changes that may be needed to your business rules.