The USDA Pilot refinance mortgage program is now available in 2014 to help homeowners that currently have a USDA mortgage refinance at a lower 30 Year fix interest rate. The best part is the USDA refinance program does not require an appraisal, equity, home inspection, or calculating debt to income ratios as long as household is under the USDA income limit for the county in which the property is located. With the new USDA refinance guidelines, it provides a less restrictive streamline form of refinancing thus saving homeowners money.
The USDA Rural Development Pilot refinance program guidelines include the following:
- The interest rate on the new USDA loan must be a minimum or 1.00% lower than the existing USDA loan.
- Rural Refinance Pilot loans must meet basic eligibility: Household income must be under the USDA county income limit – this same rule applied when the home was originally purchased.
- New term of the refinance loan must be 30 years – NO cash out permitted.
- Upfront USDA Guarantee fee is 2% of the loan amount which can be financed on top of the base loan amount
- Annual fee of 0.50%. Most USDA borrowers that purchased their home before 2011 do not have annual fee ( or PMI) currently. This fee is required for all new USDA loans after Oct 2011 and paid monthly in the mortgage payment. You can figure the amount by using the USDA mortgage calculator located at the right side of our blog page – http://www.usdamortgagesource.com/blog/
- New USDA loan refinance loan may include the principal balance of the existing USDA guaranteed loan plus accrued interest through the payoff date, and ALL closing costs.
- Reasonable and customary closing costs and other fees may be collected from the borrower by the originating company
- Income verification for all adult household members is required for income eligibility determination only, not for determining repayment ability
- Ratio waivers are not required as income is just used for compliance income calculation only for verifying the income is under the county USDA household income limit
- USDA borrowers must be employed at the time of the closing on the USDA refinance transaction or have alternate sources of income such as: retirement income, social security income, disability income, alimony or child support
- Current copy of the borrower’s credit report is required to assign the proper pricing and rate. No further review of the credit is required, except for review of the borrower’s credit score and a clean 12 month mortgage history. Please note that no late mortgage payments are allowed in the previous 12 months.
USDA Mortgage Source is Florida’s local leader in USDA Rural Development refinance and purchase loans. Visit us at www.UsdaMortgageSource.com or call 904-302-6060 to see if a USDA refinance makes sense for you. *Please note we only service homeowners in Florida.