Many Florida homeowners are currently “underwater” or “upside down”on their USDA mortgage and owe more than the home is worth. This really isn’t front page news as many Florida homeowners continue the slow road back to recovery and building equity back in 2015. The great news is that USDA & Rural Development offers a refinance program just for homeowners that have zero equity. The new USDA Pilot refinance program allows homeowners with a USDA direct home loan or USDA 502 guaranteed home loan the chance to refinance to today’s low mortgage rates and possible save hundreds per month. The best part is, negative home equity is perfectly acceptable under the new program requirements.
The USDA Streamline Refinance is a pilot program only available to eligible USDA borrowers in the 19 hardest hit states by the recent recession. The eligible states include Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oregon, Rhode Island, South Carolina and Tennessee.
USDA Rural Development estimates that over 200,000 homeowners with USDA loans are eligible for the USDA Streamline Refinance. ( Please note we only service homeowners in Florida & Georgia)
USDA Refinance Qualifying Guidelines:
As with any home loan today, the new Pilot USDA Streamline Refinance has minimum approval standards listed below:
- The home you’re refinancing must be your primary residence. You MUST currently have a USDA home loan (Regardless of lender – it can be Chase, Wells Fargo, Bank Of America, etc.. we can help)
- You must have made your last 12 months mortgage payments on-time with no late payments.
- Your household income MUST still be below the USDA income limit for your state/county. The same rule applied when you originally received your USDA mortgage. Please see the current USDA income limits here.
- Interest rate must be reduced by a minimum of 1 percentage point.
- If you have equity in your home, no cash out is permitted.
- All closing costs AND the 2% USDA Rural Development guarantee fee can be included and rolled into the new loan. No out of pocket costs to the homeowner.
Credit score requirements are pretty loose assuming you have made your mortgage payments on time. The process is quick and easy as no new appraisal or home inspection needed. The best part is, no out of pocket cost to the homeowner! All closing costs and new escrows can be added to the new loan. Everyone knows that mortgage interest rates are currently at their lowest levels in over a year, one simple call could save you hundreds of dollars per month. Call us at 800-743-7556 7 days a week with questions.
Please learn more about the USDA Rural Housing refinance program by reading the most common USDA refi Q&A here. USDA Loan Refinance for Underwater Homes