USDA Rural Streamline Refinance Loan
The USDA Streamline Refinance Loan is intended for individuals who have an existing USDA home loan and are looking to reduce their interest rate. This option is modeled after other popular streamline refinance loans, such as the successful VA Interest Rate Reduction Refinance Loan (VA IRRRL).
What Are The Benefits?
The advantage of the USDA Streamline Refinance Loan is the simplified process that makes refinancing easier. Since you already have a USDA home loan, you have already met the qualification criteria, eliminating the need for redundant documentation. The streamlined process shortens the time it takes to close on the loan and requires less paperwork. Moreover, unlike other refinancing options, there is no requirement for property inspection, and the closing costs can be rolled into the financing, reducing the upfront payment required.
To qualify for a USDA Streamline Refinance Loan, you must meet certain criteria as defined by the USDA:
- The mortgage that is being refinanced needs to be a USDA home loan
- The mortgage that is being refinanced needs to be current and not delinquent
- The refinance needs to result in the lowering of the borrower’s monthly payment and interest payments
- No cash may be taken out of the mortgage to pay for anything other than the existing loan
Home Improvement Financing?
If you have a USDA Rural Home Loan and are planning to refinance for the purpose of making home improvements, the USDA program requirements permit financing of up to 102% of the appraised value of the home. This means that you can cover the cost of improvements made after the loan has closed.
