CHICAGO, Ill., October 23, 2006--Speaking at the Mortgage Bankers Association of America's annual convention in Chicago, Ill., USDA Rural Development Administrator for Housing and Community Facilities Programs Russell T. Davis announced the expansion of a new program that is designed to expedite the handling of single family mortgage applications.

     USDA Rural Development has achieved a new milestone toward full-scale deployment of its Guaranteed Underwriting System (GUS), used by lenders to underwrite USDA Section 502, Single Family Housing Guaranteed loans. It was developed by USDA to automate the manual loan underwriting process. A unique GUS feature is that it determines a borrower's income and a property's eligibility for the Single Family Housing Guaranteed Loan Program, and it has a scorecard feature to help assess the relative risk of a loan request.

     Feedback on GUS from lenders participating in the market test has been positive. Rural Development is using the lender comments to adjust GUS prior to deployment of the system nationwide. Full implementation is scheduled to begin in January, 2007.

     "Through the use of cutting-edge technology, GUS will bolster our commitment to increase minority homeownership and expand access to single family guaranteed loans in rural communities," said Davis. "This program offers a full service automated underwriting system which will be made available in the near future for private sector use."

     Additional lenders now participating in the program include: First Federal Savings Bank in Idaho; First Arkansas Valley Bank in Arkansas; Granite Mortgage in North Carolina, Residential Mortgage Services in Maine, National City Mortgage in Michigan, and Unity Mortgage Corporation in Louisiana. Previously, Rural development tested the program with lenders including: First National Bank of Nebraska; Allied Mortgage Capital Corporation in Texas; American Southwest Mortgage in Oklahoma; Central National Bank in Kansas; Guaranty Trust in Tennessee; State Bank of Lincoln in Illinois; The Mortgage Company in Kansas; and Virginia Housing Development Authority.

     GUS will enable participating lenders to receive faster loan decisions, streamlined documentation requirements, better quality loans, more consistency in program delivery and will fulfill legal requirements under the Government Paperwork Elimination Act and the Freedom to E-File Act. Through GUS, USDA expects to see the majority of loans automatically underwritten, which enhances its ability to manage risk.

     Section 502 Guaranteed Loans are made to qualifying low- and moderate-income families to purchase modest homes in rural areas. The loans are made by mortgage lenders, such as banks, credit unions and mortgage companies. Loans can be made up to 100 percent of the appraised value of the property.