USDA Loan Refinancing

Those who have previously purchased a home using the USDA Guaranteed or USDA Direct Home Loan program may be eligible to refinance their current mortgage into a lower rate.

The USDA offers refinancing options so that rural and suburban homeowners have the opportunity to take advantage of historically low interest rates.

USDA Refinance Eligibility

To be eligible for USDA Loan refinancing, homeowners must currently have a Section 502 Guaranteed or Direct Home Loan, the residence must be their primary residence, the homeowner must have made 12 prior payments, and the borrower must provide current income and assets documentation for the household. As an added benefit, properties that are now not currently eligible, but were eligible at the time of closing are still eligible for refinancing.

Streamline Refinancing

The USDA Streamline Refinance program has the added benefit of speeding up the refinancing process by not requiring a new appraisal or property inspection. With the USDA Streamline, only those who have a USDA Guaranteed Loan may be eligible.

With the USDA Streamline, potential applicants are required to have their credit profile ran, as well as provide all documentation of income and assets for the household. Additionally, with a USDA Streamline Home Refinance, homeowners can add or remove borrowers from the current loan.

Non-Streamlined Refinancing

The non-streamlined program, which requires an appraisal, is available for both Section 502 Direct and Guaranteed Loans. Similar to the USDA Streamline, applicants must provide a credit report, with documentation of household income.

With the Non-Streamline Refinance, a new appraisal will be required, but homeowners can refinance the principle balance of the loan, the USDA funding fee, accrued interest, closing costs and fees.

Rural Refinance Pilot Program

The USDA’s Rural Refinance Pilot program – duplicating the success of other streamline programs like the VA and FHA streamline – works to make the refinance process even faster by adding no credit report requirements, no appraisal requirements and no property inspection requirements.

Additionally, with the streamline refinance, the home’s loan-to-value does not play a role in determining eligibility, which means homebuyers who are underwater may also be eligible for the program.

The USDA Streamline refinance is only available in the following 34 states:

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Michigan, Mississippi, Missouri, Montana, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington, West Virginia, and Wisconsin.