What is 'USDA Streamlined Refinancing'

A mortgage-refinancing option offered by the United States Department of Agriculture (USDA). USDA streamlined refinancing is available to homeowners who purchased their home using a Section 502 loan, which is a loan available to low-income individuals and households in rural areas. The refinancing option is available in all U.S. states and territories.

BREAKING DOWN 'USDA Streamlined Refinancing'

USDA streamlined refinancing is for a fixed-rate loan with a 30-year term. The interest rate must be lower than the interest rate of the loan being refinanced. The USDA does not require an appraisal on a streamline refinance, but does require a credit report to be available.

The property being refinanced must be the borrower’s primary residence, but does not have to be located in a currently eligible rural area. Homeowners do not qualify if they are refinancing a loan offered by the FHA, VA, Fannie Mae or Freddie Mac.

The phrase “streamline refinance” refers to the reduced amount of paperwork and underwriting that the lenders must work with.

USDA Non-Streamlined Refinancing

What is 'USDA Non-Streamlined Refinancing'

A mortgage refinancing option offered by the United States Department of Agriculture (USDA). USDA non-streamlined refinancing is available to homeowners who purchased their home using a Section 502 Direct or Guaranteed loan. These are loans made available to low-income individuals and households in rural areas. The refinancing option is available in all U.S. states and territories.

BREAKING DOWN 'USDA Non-Streamlined Refinancing'

Unlike loans made under the USDA streamlined refinancing program, non-streamlined refinancing mortgages require that the property be appraised. In addition to the principal balance, a non-streamlined refinancing loan can include guarantee fees, accrued interest, lender fees and closing costs if the appraised value of the home is greater than the principal loan amount. However, unpaid fees cannot be included.

USDA non-streamlined refinancing is for a fixed-rate loan with a 30-year term. The interest rate must be lower than the interest rate of the loan being refinanced. A credit report is required. Homeowners do not qualify if they are refinancing a loan offered by the FHA, VA, Fannie Mae or Freddie Mac.

USDA Rural Refinance Pilot Program

What is 'USDA Rural Refinance Pilot Program'

A mortgage-refinancing option offered in some states and territories by the United States Department of Agriculture (USDA). The USDA rural refinance pilot program is available to homeowners who purchased their home using a Section 502 Direct or Guaranteed loan. These are loans made available to low-income individuals and households in rural areas.

BREAKING DOWN 'USDA Rural Refinance Pilot Program'

Homeowners looking to refinance a guaranteed loan do not need to have their home appraised, but those who have direct loans do need to have an appraisal. In addition to the principal balance, guarantee fees, accrued interest and lender fees may be included. Lenders may also charge an origination fee.

Unlike with USDA streamlined and non-streamlined refinancing, the rural refinance pilot program does not require a credit report. Instead, homeowners must show that they have made their mortgage payments for the previous 12 months. The interest rate charged on the new loan is at a fixed rate at least 100 basis points below the interest rate on the current loan.

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