Your City, Your State USDA Streamline Refinance
Lenders may offer a streamlined refinance without obtaining a new appraisal. All other costs, documentation, and underwriting requirements remain consistent with a purchase guarantee, unless otherwise noted. With this option, the lender will refinance the principal balance of the existing Section 502 Guaranteed loan. This option is not available for Section 502 Direct loans. The loan amount cannot exceed the principal amount of the existing loan refinanced plus the one time guarantee fee of 0.5 percent of the loan amount. Accrued interest, closing costs, and lender fees cannot be financed with this option.
The USDA will further streamline this program by eliminating the requirement for a new appraisal, a new credit report, and other documentation normally required in refinancing. To be eligible, a borrower need only demonstrate that he or she has been current on their loan. The streamlined pilot program is being offered in 19 states and has the potential to help an estimated 230,000 rural homeowners refinance their loans and reduce their monthly mortgage costs.
*USDA does allow for the refinance of current USDA Guaranteed or USDA Direct Mortgages.
The non-streamlined refinance option requires an appraisal. Your State Lenders offering the non-streamlined refinance option may include in the loan the principal and interest of the existing loan, closing costs, lender fees, and the guarantee fee of 0.5 percent of the loan amount to the extent sufficient equity in the property, as determined by an appraisal. The appraised value may be exceeded only to the amount financing represents the 0.5 percent guarantee fee.
Basic Requirements For USDA Refinance
USDA, which supports mortgage financing for thousands of rural families a year, is taking steps to further streamline its USDA-to-USDA refinancing program. This program is designed to provide those who currently have loans insured by the Department of Agriculture in Your City, Your State with a low-cost, streamlined process for refinancing into today's low rates.
- Mortgage to be refinanced must already be a USDA loan.
- There must be a financial benefit resulting from the refinance.
- Borrower must be current on the present mortgage payments.
If you're a homeowner in a rural part of the country and need financial help with your mortgage, you have options. The United States Department of Agriculture (USDA) has a streamline refinance program that it has recently been working on to make even easier for the thousands of homeowners in need. Many rural homeowners have been left in rough financial situations after the housing market collapse and the continued decline of home values. If this sounds like a situation you or someone you know is stuck in, a USDA refinance might be the right option for you and your family.
USDA Home Loan Refinance Benefits
- Low fixed monthly payments
- Low to no closing costs for streamlines
- Low monthly mortgage insurance
- 100% USDA financing
- No pre-payment penalty
- Low USDA interest rates
- Streamline with USDA
The USDA Streamline Refinance Program was designed with the intention of helping out responsible homeowners who are current on their mortgage and have the desire to lower their interest rate. This is a great opportunity for Your State homeowners with a current USDA loan and are unable to qualify for a conventional loan for refinancing.
This is part of President Obama's financial plan to help responsible homeowners. President Obama is focused on helping responsible borrowers and supporting the housing market recovery. While the government cannot fix the housing market on its own, the President believes that responsible homeowners should not have to sit and wait for the market to hit bottom to get relief when there are measures at hand that can make a meaningful difference, including allowing these homeowners to save thousands of dollars by refinancing at today's low interest rates.
What are the basic requirements for a USDA Refinance in Your City, Your State? The mortgage to be refinanced should be current (not late). The mortgage to be refinanced must already be a USDA Loan (Direct or Guaranteed). No cash may be taken out on mortgages refinanced using the USDA loan refinance process. The refinance is to result in a lowering of the borrower's monthly principal and interest payments.
The USDA streamline refinance is designed to lower the interest rate on a current USDA mortgage and is only available in a fixed rate. If you do not currently have a USDA Mortgage on your home, you are not eligible for a USDA Refinance and you may want to consider conventional, VA, or FHA refinancing program (whichever fits the type of loan you currently have). If you bought your home through a USDA home purchase program then you are eligible for a USDA home streamline refinance.
USDA has allotted a designated amount of money for funding of USDA mortgage loans in each USDA qualifying areas. Your City, Your State Homeowners may qualify to use available funds to refinance their current USDA mortgage. As with most loan programs, there are certain qualifications, eligibility guidelines, and restrictions that apply to the USDA loan program.
The two-year pilot program is open to homeowners in Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, and Tennessee. For more information, contact any USDA Rural Development state office.
There is no set maximum loan amount allowed for a USDA loan. Instead, your debt-to-income ratios will dictate how much you can afford (29%/41% ratios). Additionally, your total household monthly income must be within USDA allowed maximum income limits for your area. The maximum USDA Rural Loan amount will be 102% of the appraised value of the home (100% plus the 2% USDA loan guarantee fee).