USDA SFH Guaranteed Loan Program Fully Reopens — New PITI Guidelines & What Kentucky Homebuyers Need to Know (November 2025)
The USDA Single-Family Housing Guaranteed Loan Program (SFHGLP) is officially back to normal operations following the end of the federal government shutdown. Funding is available, Conditional Commitments are being issued, and lenders can now move USDA files forward again. However, USDA has also implemented a major guideline change that impacts borrower eligibility.
USDA Is Fully Operational Again
Important: Loans must not close before receiving Form RD 3555-18, Conditional Commitment. A GUS recommendation (“Accept,” “Refer,” etc.) is not the same as a Conditional Commitment. Closing without the Commitment will disqualify the file from an LNG.
New USDA Ratio Guideline: PITI Reduced to 29%
USDA previously announced the permanent reduction of the maximum PITI ratio from 34% down to 29%, effective November 4, 2025. This change impacts eligibility for many borrowers in Kentucky—especially first-time buyers and households with tighter debt-to-income ratios.
Which Borrowers Get 29% vs. 34%?
- Applications submitted in GUS before November 4 (Final Submission)
These will continue to follow the prior guideline allowing up to 34% PITI. - Applications submitted in GUS on or after November 4
These must follow the new 29% PITI rule.
USDA will update the official handbook (HB-1-3555, Chapter 11, Ratio Analysis) soon to reflect this policy revision.
Conditional Commitments Are Being Issued — But Delays Are Likely
USDA is actively issuing Conditional Commitments; however, the Agency is processing requests strictly in the order received. Due to the backlog, files may take longer than typical to be reviewed. Lenders, agents, and borrowers should prepare for extended turn times during this transition period.
Recommendation: Build extra time into contract deadlines for USDA loans over the next few weeks.
Lenders Asked to Review and Clean Up Their USDA Pipeline
To help manage workload and reduce backlog, USDA is asking lenders to withdraw any files that no longer need to be processed. This includes applications where borrower circumstances have changed, contracts fell through, or the borrower has moved to another loan product.
How to Withdraw a File in GUS
- Status: Unknown or Preliminary
You can withdraw the application directly in GUS. - Status: Final Submission but still Pending
Recall the Final Submission → then withdraw. - Status: In Process or Approved
Contact your USDA Origination & Processing Division (OPD) to remove the request and release funds.
See HB-1-3555, Chapter 14.5 for full guidance.
What This Means for Kentucky Homebuyers and Realtors
This update carries real, on-the-ground implications for buyers and contracts in the Kentucky market:
- Some buyers who were previously eligible may no longer qualify under the reduced 29% PITI ratio.
- Loans locked into the old 34% rule (submitted pre-Nov 4) are still protected.
- Turn times will likely be slower as USDA clears backlog.
- Do not close any USDA loan until the lender has the official Conditional Commitment in hand.
I will continue monitoring USDA turn times and guideline updates to keep all borrowers and partners informed.
Copy-and-Paste Messaging for Buyers & Realtors
For Realtors:
“USDA has reopened and is issuing commitments again. The max PITI ratio permanently changed from 34% to 29% as of November 4, so some buyers may see eligibility changes. USDA is processing a backlog, so allow extra time on USDA deals and make sure the Conditional Commitment is received before closing.”
For Buyers:
“USDA is back up and running. Your loan is still moving forward. Because the Agency is catching up from the shutdown, there may be slight delays, but funding is available. I’ll keep you updated as your file moves toward full approval and the Conditional Commitment.”
Need Help with USDA Eligibility in Kentucky?
If you are a homebuyer or realtor looking to confirm if a property qualifies for a USDA loan in Kentucky, you can use the official eligibility map:
➡️ Check USDA Property Eligibility Here
Or contact me directly for a full income, credit, and property eligibility review.
About the Author
Joel Lobb, Mortgage Broker FHA, VA, KHC, USDA
, Mortgage Broker – FHA, VA, USDA, KHC, Fannie Mae
NMLS #57916 | Company NMLS #1738461
Call/Text: 502-905-3708
Email: kentuckyloan@gmail.com
Website: www.mylouisvillekentuckymortgage.com
Equal Housing Lender. This is not a commitment to lend. All loans subject to credit approval.
