The USDA Refinance Program is a new program that is being offered through the agency of the United State Department of Agriculture – Rural Housing Service (RHS). This program is specifically designed for those homeowners who already have a USDA loan for a rural home. This program help these homeowners get a refinance to a new loan with a lower interest rate when they find themselves underwater due to the current economic downturn.
Advantages of USDA Refinance Pilot Program
This refinance program has extremely flexible qualification requirements and the applicant or the borrower is not even need required to submit a credit report, or a new appraisal. However in some cases the credit report may be needed solely for the purpose of pricing and an appraisal will be required only in cases where a direct loan needs to be refinanced into a new guaranteed loan.
Apart from the above mentioned benefits, this program also offers lower payment, interest rate that can be drastically reduced to a minimum of 1% and the cost of closing can be financed easily. Moreover, no added property inspection is required under this program and the applicant does need to qualify any credit examination or debt ratio.
USDA Refinance Pilot Program Eligibility Requirements
The eligibility requirements under this program are simple and few. The borrower needs to meet the minimum income eligibility line as set by the USDA. The property that needs to be refinanced must be located in the eligible rural area under the guidelines of the USDA. Apart from the above mentioned requirements the borrower should have made all his mortgage payments for a period of one year prior to refinance in a timely manner. Currently, 34 states in the country are eligible for the USDA refinance pilot program.