The U.S. Department of Agriculture has awarded a contract to expertise providers agency Phoenixteam because it seeks to improve its mortgage underwriting platform, whose capabilities have lengthy lagged these of its friends.
The $49 million deal paves the way in which for the Arlington, Virginia-based agency to replace the Guaranteed Underwriting System at USDA, which provides mortgage merchandise particularly geared towards farming and rural communities. The upgrades are anticipated to encourage broader mortgage trade curiosity in USDA’s assured mortgage program and open up alternatives for reasonably priced housing in extra areas, Phoenixteam stated.
“This award is about greater than expertise — it is about entry to homeownership,” stated Phoenixteam CEO Tanya Brennan in a press launch. “By modernizing USDA’s Guaranteed Underwriting System, we make it simpler for lenders to ship this product, which is commonly the one path to homeownership for rural households.”
Key among the many enhancements coming to GUS is automated importing of mortgage purposes to USDA — a characteristic that has lengthy been accessible on programs at government-sponsored enterprises Fannie Mae and Freddie Mac.
Lenders vital of the GUS platform had beforehand described it as “not intuitive,” “complicated” or “cumbersome,” typically requiring guide re-entry of information. Difficulties in understanding the way to use the system discouraged some mortgage officers from originating USDA mortgages, they claimed.
Efforts to replace the platform in the years because it first launched in 2006 have been thwarted in the previous because of limitations in funding or different sources.
Who are among the many main USDA originators?
While USDA-backed mortgages make up only a tiny share of whole trade quantity, they play an necessary function in the division’s objectives for financial improvement.
Getting the USDA on top of things with GSE requirements will make it simpler for lenders so as to add financing choices for rural debtors and in addition helps USDA’s mission to create homeownership and wealth alternatives in underserved communities, Phoenixteam stated.
The firm was based in 2015 by mortgage expertise consultants who had beforehand collaborated at IBM, the Department of Veterans Affairs and Black Knight Financial Services.
USDA provides two mortgage choices for homebuyers alongside different loans for repairs and renovations. Guaranteed mortgage merchandise are made accessible to debtors by means of mortgage lenders, whereas its direct lien is originated by the division itself.
According to USDA’s rural improvement workplace, Guild Mortgage ranks as 2025’s prime originator of assured loans when measured by unit quantity. The San Diego-based firm is adopted by D.R. Horton subsidiary, DHI Mortgage. Two Missouri-based establishments, Neighbors Bank and Flat Branch Mortgage comply with in third and fourth positions. Newly renamed Fairway Home Mortgage rounded out the highest 5.
The whole variety of USDA originations made up a 0.6% sliver of general lending quantity in the nation final 12 months, with 36,173 transactions, knowledge from the Home Mortgage Disclosure Act confirmed. Combined balances of originations added as much as simply over $6.4 billion.
By comparability, general originations throughout all mortgage varieties approached 6.2 million models with a stability of roughly $2 trillion {dollars}.
