USDA Streamline Refinance

If you currently have a USDA loan, chances are good that you received 100 percent financing with no-money down. The benefits of USDA home buying loans are outstanding, and the refinancing opportunities are equally beneficial in comparison to some other types of home loans.  The interest rate you currently pay probably was offered at a competitive rate compared to other loan program available. You may believe that the loan you currently have cannot get any better. With rates continuing to stay low in 2023, you may have an opportunity to save money on your monthly payment.

Borrowers who have a 502 Direct or Guaranteed mortgage through the USDA may qualify for a refinance program that would lower the current interest rate on the loan. The USDA Streamlined Rural Refinance program allows you to replace your existing USDA mortgage with a new loan at a lower interest rate. Many homeowners are unaware of the program because they are satisfied with their current mortgage. However, the program offers some unique options that can improve your current mortgage and save you thousands of dollars.

Advantages of the USDA Refinance Program

Below are some of the advantages of the USDA streamline refinance program:

• There is no appraisal required through the refinance program which saves you money at the closing table.
• You fill out fewer forms and provide less documentation to qualify since most of the information already exists on file. This allows for quicker approval times where you can start to enjoy your savings immediately.
• The program does not require property inspections. Save up to $400-$500 on the average cost of an inspection at closing.
• Since the program refinances your existing mortgage into a new mortgage with a lower interest rate, your monthly principal and interest payment decreases.
• Finance up to 102 percent of the appraised value of your home if you need to make improvements.
• There is no credit score requirement for the USDA Rural Refinance program.
• If you currently owe more on your original loan than the home is worth, you can still refinance.

Would you like to see if you qualify for a USDA streamline loan?  We can help match you with a mortgage lender that offers USDA loans in your location.

Click here to get matched with a USDA lender

USDA Streamline Refinance Eligibility Requirements

Below are some of the basic requirements of the USDA streamline refinance program:

• The USDA requires that no payments you made over the past 12 months were delinquent.
• The loan can only serve as a rate and term refinance. You are not allowed to take cash out of any existing equity in the home.
• The current loan must be a 502 Direct or Guaranteed loan from the USDA.
• The home you wish to refinance must be your primary residence.

Click here to get matched with a USDA lender

Frequently Asked Questions

Do I have to pay for mortgage insurance again?
Yes, whenever you start a new USDA loan you must pay the guarantee fee (which acts and is also referred to as mortgage insurance). You always have the option to refinance the upfront mortgage insurance into the loan amount, so it does not have to be paid out of pocket.

Can I take cash out when I refinance my USDA loan?
Cash out refinancing is not available for USDA loans on a USDA-to-USDA refinance.  However, you may refinance out of your USDA loan and into a FHA or conventional mortgage.  This would allow you to cash out refinance and change loan types.