The U.S. Department of Agriculture is doubling the number of lenders in a pilot program designed to speed up rural mortgage closings.
Six additional lenders will join USDA's Delegated Authority Lender Interactive Test Environment (LITE) Pilot Program on Dec. 1, bringing the total number of selected participants to 12.
The latest additions are Bangor Savings Bank, Fairway Independent Mortgage Corp., New American Funding, Pennymac Loan Services, Pulte Mortgage, and Union Home Mortgage.
They join the original six lenders that began participating Sept. 1: DHI Mortgage, First State Community Bank, Lennar Mortgage, loanDepot, United Wholesale Mortgage (UWM), and 1st Signature Lending.
The expansion shifts more responsibility for USDA loan approvals from the federal government to participating lenders.
A Key Approval Step Moves To Lenders
Under the traditional USDA Single Family Housing Guaranteed Loan Program process, lenders must obtain agency approval before closing eligible loans.
The LITE pilot changes that arrangement by allowing selected lenders to approve qualifying mortgages and proceed toward closing with minimal USDA involvement, provided they comply with the agency's underwriting and program requirements.
The change represents more than an effort to shorten closing timelines. USDA is transferring greater responsibility for pre-closing loan approvals to participating lenders, shifting the agency's oversight toward post-closing reviews. That gives lenders more control over the approval process while increasing their responsibility for ensuring loans meet federal requirements.
The potential benefit is a more predictable closing process, particularly when USDA approval turnaround times threaten purchase contract deadlines.
The program also raises competitive considerations. Participating lenders may be better positioned to offer faster or more reliable closing timelines than lenders still subject to the traditional approval process.
What Changes For Brokers?
The expansion brings several major lenders with wholesale, correspondent, retail, or builder-affiliated operations into the delegated approval framework.
UWM, one of the nation's largest wholesale lenders, was among the original participants. Pennymac and Fairway are among the lenders joining in December.
The operational benefit will depend on how participating lenders make delegated approvals available through their respective channels.
USDA's selection of a lender does not necessarily establish that every broker, correspondent, or retail origination channel within that company is using the delegated process.
The pilot still introduces a potentially important competitive distinction in USDA lending: which lenders can move eligible files toward closing without the agency's traditional preclosing approval.
Faster Approvals Shift More Responsibility To Lenders
The pilot does not relax USDA underwriting standards. Instead, it changes when and how the agency exercises oversight.
Under the pilot's operating procedures, submissions through USDA's Guaranteed Underwriting System (GUS) are to be completed within two business hours, while manually underwritten submissions follow standard processing timeframes. The two-hour provision applies to GUS processing, not the entire mortgage approval or closing process.
Participating lenders must continue meeting federal underwriting and documentation requirements, but USDA is shifting more of its compliance monitoring to post-closing reviews.
Under the pilot's oversight procedures, USDA initially reviews between five and 15 loan files per participating lender, depending on volume, followed by reviews of 2% of each lender's monthly originations.
Lenders generally have 90 days to correct identified compliance deficiencies. USDA also retains authority to remove lenders from the pilot for violations, and participating lenders remain subject to potential indemnification obligations.
The program also changes post-closing documentation procedures. Rather than routinely uploading complete loan files, participating lenders submit required closing information and provide additional documentation when USDA requests it.
Participation is selective. USDA evaluates lenders based partly on historical loan performance, including delinquency, default, and loss-claim metrics, along with compliance records.
For participating lenders, the trade-off is greater control over loan approvals in exchange for greater accountability after closing.
A Preview Of Broader Changes In 2028
The expansion is part of a larger shift in how USDA intends to administer its guaranteed mortgage program.
A final rule published in March establishes a broader delegated authority framework, with full implementation scheduled for Sept. 28, 2028.
The current pilot, which began Sept. 1, is designed to test that approach before the wider rollout.
The goal is to move USDA lending closer to the delegated approval models already used in other government-backed mortgage programs, while reducing the agency's direct involvement in individual loan approvals.
For mortgage brokers and loan originators, the immediate question is whether delegated approvals will translate into faster, more predictable closings — and which lending channels will benefit.
For lenders, the stakes extend beyond speed. USDA is testing a model that transfers more responsibility for loan approvals and compliance to the institutions originating the mortgages, ahead of broader implementation in 2028.
With 12 lenders now selected for the pilot, that shift is beginning to take shape across the rural mortgage market.
