What must lenders obtain before closing a loan?

Before closing a loan under the USDA Rural Housing Loan program, lenders are required to obtain a conditional commitment. This is a crucial document provided by the USDA that indicates that the property meets all eligibility and program guidelines required for financing. The conditional commitment assures the lender that the loan will be guaranteed by the USDA once all conditions are met.

This process is vital because it confirms that the loan is in compliance with USDA policies, protecting both the lender and the borrower from potential issues post-closing. Additionally, it typically includes conditions that must be satisfied before the final loan approval, ensuring that lenders are aware of any outstanding requirements that need to be addressed.

The other options, while important in different contexts of the loan process, do not specifically indicate the compliance assurance that a conditional commitment provides. Employment verification and credit history reports are generally part of the underwriting process to assess a borrower's ability to repay the loan, while a final inspection report is usually conducted before closing to confirm that the property is in acceptable condition. However, these documents do not replace the necessity of a conditional commitment from the USDA.