USDA only allows refinance of current USDA Guaranteed or USDA Direct Mortgages
The USDA refinance is designed to lower the interest rate on a current USDA mortgage and is only available in a fixed rate. A USDA Streamline Refinance Loan can be performed quickly and easily. USDA Refinance Loans require no property inspection.
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 an FHA Refinance, Conventional Refinance or VA Refinance.
What are the basic requirements for an USDA Refinance?
- The mortgage to be refinanced must already be a USDA Loan (Guaranteed or Direct).
- The mortgage to be refinanced should be current (not delinquent).
- The refinance is to result in a lowering of the borrower’s monthly principal and interest payments.
- No cash may be taken out on mortgages refinanced using the USDA loan refinance process.
How much can I refinance?
The maximum amount for a USDA Refinance is determined by:
- Maximum refinance amount
The is no maximum loan amount allowed for USDA rural development refinance loans. Instead, debt-to-income ratios will dictate how much you can afford (29/41 ratios). Additionally, total monthly income for your household must be within USDA allowed maximum limits for your area.
- Maximum financing
The maximum USDA refinance loan amount is 102% of the appraised value of the home (100% plus the 2% USDA loan guarantee fee).
Learn more about USDA loans.