The new USDA Streamline Assist (Pilot) Refinance program is now available to eligible borrowers who qualify to refinance their current USDA mortgage loans. This limited time program by Rural Housing ( RD) is offered through approved lenders and brokers and designed to give homeowners a simple “streamlined” way to refinance into lower interest rates. The best part is the USDA program doesn’t require a new appraisal report, or home inspection report. So homeowner that have zero equity, or even underwater home values can apply! In addition to this, the lender does not need to submit a new credit report except for determining the interest rate the homeowner receives. USDA mortgages, like other home loans, have tiered interest rates based on credit score. Generally, credit scores over 720 receive the lowest USDA interest rates, while credit score under 640 maybe 0.25- 0.5% higher rates.
USDA Refinance Benefits:
- Lower payment
- Minimum monthly payment reduction of $50.00 required
- Closing costs can be financed/added to the loan so NO out of pocket costs to the homeowner at closing
- No appraisal or home inspection needed – saves on closing costs
- The borrower does not have to credit qualify or debt ratio
Eligible Borrowers For USDA Refinance:
- The homeowner must currently have a USDA 502 Guaranteed Loan (regardless of the original lender)
- Meet current household income eligibility requirements see below ( this rule also applied when the loan was originally obtained)
- Reside in an eligible rural area or an area that was eligible at the time of the original loan closing
- Have made timely mortgage payments for the 12-month period prior to the refinance.
- If you do have equity in your home, you cannot “cash out” any equity
2016 USDA income limits for Florida, most other states are similar.
In regards to income limits – please add $480.00 for each dependent in the household. Please also note this applies to all income-producing household members – even if they are NOT applying for the loan. Contact us if your income is close to the limit, as there are other deductions for certain child care and elderly.
Again, this program is strictly for homeowner that currently have a USDA home loan. If you have another type of home loan like FHA or VA, please contact us about the FHA streamline or VA IRRRL refinance. We can be reached Ph: 800-871-2636. Homeowners can also send in the short “Request Contact” form at the top right side of your screen.