Integrity..Knowledge..Results

Main menu

USDA Lowers Cost to Refinance Rural Housing Loans

WASHINGTON, May 16, 2016 USDA Rural Housing Service Administrator Tony Hernandez today announced a series of changes that will make it faster and cheaper for homeowners to refinance USDA mortgages.

The changes take effect June 2, 2016 and apply to mortgages issued through USDA and those where USDA has issued a loan note guarantee.

Homeowners current on their mortgages for the past 12 months will no longer be required to secure an appraisal, provide a credit report or undergo a debt-to-income calculation when they refinance for a 30-year term. These changes will save time and money.

USDA began testing these changes in a 2012 a pilot program that was later expanded to include 34 states and Puerto Rico. To date, nearly 9,500 homeowners have refinanced their mortgages. Some borrowers saved as much as $600 a month. The average savings is around $150 per month.

The streamlined rules are consistent with banking industry lending standards. These refinanced loans, like all USDA Rural Development housing loans, meet rigorous underwriting standards and are made only to qualified borrowers. The Department of Housing and Urban Development and Department of Veterans Affairs have similar programs for the Americans they serve.