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USDA "Streamline" Refinance

USDA does allow for the 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 avaiable in a fixed rate. A USDA 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 Loan Amount
The is no set maximum loan amount allowed for an USDA Loan. Instead, your debt-to-income ratios will dictate how much home your can afford (29/41 ratios). Additionally, your total household monthly income must be within USDA allowed maximum income limits for your area. Maximum USDA Guaranteed Loan income limits for your area can be found at here.

Maximum financing
The maximum USDA Rural Loan amount will be 102% of the appraised value of the home (100% plus the 2% USDA loan guarantee fee).

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 Why choose a USDA Mortgage?

  • USDA Loans require no down payment.
  • There are no prepayment penalties for USDA Rural Home Loans.
  • A USDA Rural Development Loan has no monthly mortgage insurance.
  • A USDA Rural Development Mortgage is available all rural areas of the country, provided a market exists for the property and the home meets HUD's minimum property standards.
  • A USDA Rural Housing Loan can be used to purchase a new or existing one family home in rural areas.
  • USDA RD Loans are offered at terms of 30 years with a fixed interest rate.



 USDA Loan FAQs

What is Considered a Rural Area by the USDA?
Rural areas include open country and places with population of 10,000 or less and—under certain conditions—towns and cities. There is an automated rural area eligibility calculator for USDA home loans at: http://eligibility.sc.egov.usda.gov.

What is the Maximum Loan Amount for a USDA Loan?
There is no maximum loan amount for a USDA rural mortgage. However, it is limited by the appraised value and repayment ability (determined by your household income).

What is the Maximum LTV for a USDA Loan?
The maximum USDA rural loan LTV can be up to 100% LTV plus the Agency guarantee fee.

Can Closing Costs be Financed into the Loan?
Yes, any difference between the contract price and the appraisal value can be used to finance normal closing costs for a USDA mortgage.

What is a USDA Loan Guarantee?
USDA Rural Development Single Family Housing Program serves as a safety net for mortgage lenders. The USDA provides the full faith and assurance of the U.S. government that any financial loss resulting from servicing the loan will be reimbursed in full up to an amount not exceeding 90% of the original loan amount. All loss up to an amount not exceeding 35% of the original loan is fully reimbursed. Any loss amount exceeding the 35% is 85% reimbursed. This leaves the lender only 15% exposed on the loss amount above the 35% of original loan. In the majority of cases, the total loss does not exceed 35% of the original loan and the lenders are fully reimbursed. This guarantee provides lenders an expanded level of protection against losses. The quality of this guarantee allows lenders to easily sell the loans on the secondary market.




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