If you have a rural housing loan from the U.S. Department of Agriculture and are thinking about refinancing, the government may have just saved you money. That’s because effective June 2, 2016, the USDA made changes that make it faster and cheaper to refinance your loan.
Have you been current on your USDA mortgage loan for the past 12 months? Are you refinancing for a 30-year term? Then you won’t need to secure an appraisal, provide a credit report or undergo a debt-to-income calculation.
The USDA tested these changes through a pilot program started in 2012 that has seen almost 10,000 homeowners refinance their mortgages, saving, on average, $150 per month. These changes aren’t unique in the mortgage industry. In fact, streamlined refinancing rules are available for loans backed by the Department of Housing and Urban Development and the Department of Veterans Affairs.
These loans that are being refinanced aren’t for farms and ranches. The USDA Single Family Housing Guaranteed Loan Program makes it easier for eligible applicants in less-populated areas to afford a residential mortgage loan. While the house must be in a rural area, the department’s definition of “rural” stretches pretty far. Most small towns and even some suburbs fall within the program’s boundaries. Some of the program’s benefits:
Whether you want to use the new streamlined refinance rules or inquire about a new USDA loan, ask your lender. He or she can verify your eligibility and walk you through the process.