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USDA Streamline Refinance Program

USDA Streamline Refinance Program

    • USDA Streamline Refinance Program Key Considerations
    • Pros Cons
      • Save time and money when you refinance an existing USDA home loan
      • Fewer borrower qualification requirements -- no appraisal report, credit report or borrower debt-to-income ratios
      • Lower interest rate
      • No loan-to-value ratio limit so underwater borrowers are eligible for program
      • Borrowers are required to pay up-front and ongoing USDA mortgage insurance fees
      • Limited mortgage program options (fixed rate mortgage only)
      • Property and loan eligibility requirements
      • No cash-out refinancings
    • USDA Streamline Refinance Program Overview
    • The USDA Streamline Refinance Program enables borrowers to refinance an existing USDA home loan with significantly fewer borrower qualification requirements than a standard mortgage refinance. Officially called the USDA Streamlined-Assist Refinance, the program is designed to make it easier for USDA home loan borrowers to refinance into a more affordable mortgage with a lower monthly payment.  The main advantages of a USDA Streamline Refinance as compared to a standard mortgage refinance are that the USDA Streamline Program does not require borrowers to obtain a property appraisal report, provide a credit report or meet debt-to-income ratio requirements.  Because the program does not require an appraisal, there is no loan-to-value (LTV) ratio limit which means that borrowers who are underwater on their mortgage are eligible for the program.  If you are underwater on your home it is usually impossible to refinance your mortgage with standard refinance programs.

      By simplifying and streamlining the refinance process, the USDA Streamline Program enables more borrowers to refinance and saves them time and money. For example, eliminating the appraisal and credit report fees saves the borrower hundreds of dollars.  Additionally, the USDA Streamline Program does not require that borrowers obtain a property inspection report, which saves borrowers more money.  The streamlined application process also enables borrowers to close their refinancing faster.  A typical streamline USDA home loan refinance takes less than a month to close as compared to more than a month or potentially longer for a standard mortgage refinance.

    • What Lenders Offer the USDA Streamline Refinance Program
    • The USDA Streamline Refinance Program for guaranteed loans is offered USDA-approved private sector lenders such as banks, mortgage banks and mortgage brokers. The USDA does not promote any particular lender but offers a list of approved lenders as well as a list of USDA Guaranteed Loan Program local contacts on the USDA web site.  Borrowers seeking to use the USDA Streamline Program to refinance a direct loan should contact the USDA office in their state.

      • Click on a lender below or INTEREST RATES to contact lenders about the USDA Streamline Refinance Program
    • Rate Details*
      Loan Program:  
      Monthly Payment:  
      APR:  
      Rate:  
      Points  More Info:
      Points: Fees you are willing to pay in order to get a lower interest rate. The number of points refers to the percentage of the loan amount that you would pay. For example, "2 points" means a charge of 2% of the loan amount.
       
      Total Lender Fees:  
      Loan type:  
      Property Value:  
      Loan to Value:  
      Credit Rating:  
      Date Submitted:  
      Monthly Housing Payments
      P & I More Info
      Principal & Interest: A periodic payment, usually paid monthly, that includes the interest charges for the period plus an amount applied to the reduction of the principal balance.
      Mortgage Insurance More Info
      Mortgage Insurance: The monthly cost for a policy that protects the lender in case you’re unable to repay the full amount of the loan. It is typically required for loans that have a loan-to-value ratio between 80% to 100%.
      (Estimated)
      Property Tax More Info
      Property Tax: (Also called "Real Estate Tax.") Property taxes are government assessments on real estate property. With mortgage financing, the local, county or state tax assessment on real estate property is considered part of the monthly housing obligation and typically collected and set aside by the lender ...
      (Estimated)
      Homeowner Insurance More Info
      Homeowner Insurance: or also commonly called hazard insurance, is the type of property insurance that covers private homes. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one’s home, its contents, loss of its use, or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home or at the hands of the homeowner within the policy territory.lender ...
      (Estimated)
      Homeowner Association Fee More Info
      Homeowner Association fee: (HOA) fees are funds that are collected from homeowners in a condominium complex to obtain the income needed to pay (typically) for master insurance, exterior and interior (as appropriate) maintenance, landscaping, water, sewer, and garbage costs.
      (If Any)
      Total Monthly Housing Payments
      Lender Fees
      Points More Info
      Points Fees you are willing to pay in order to get a lower interest rate. The number of points refers to the percentage of the loan amount that you would pay. For example, "2 points" means a charge of 2% of the loan amount.
      Origination Fee More Info
      Origination Charge: A loan origination charge is a fee charged by the lender for evaluating, processing, and closing the loan.
      Credit Report Fee More Info
      Credit Report Fee: Fee charged to obtain an applicant’s credit history prepared by one or all of the three major credit bureaus. Used by lender to determine the borrower’s creditworthiness.
      Tax Service Fee More Info
      Tax Service Fee: A fee charged by the lender to cover the cost of retaining a tax service agency. These agencies monitor the property tax payments on the property and report the results to the lender.
      Processing Fee More Info
      Processing Fee: A processing fee is a charge by the lender for clerical items associated with the loan. Examples of processing include loan set up, organization of loan conditions for underwriting, and preparing required disclosures for the borrower.
      Underwriting Fee More Info
      Underwriting Fee: A fee charged by the lender to verify information on the loan application, authenticate the property’s value, and perform a risk analysis on the overall loan package.
      Wire Transfer Fee More Info
      Wire Transfer Fee: In most cases lenders wire funds to escrow companies to fund a loan. Commercial banks that perform this function will charge the lender so the fee is generally passed on to the borrower.
      (If Any)
      FHA Upfront Premium More Info
      FHA Upfront Premium: A fee paid in cash at the close of escrow or more commonly it is financed into the loan. These premiums are pooled together by the FHA and are used to insure the risk of borrower default on FHA loans. FHA upfront premiums are prorated over a five year period, meaning should the homeowner refinance or sell during the first five years of the loan, they are entitled to a partial refund of the FHA upfront premium paid at loan inception.
      (If any)
      VA funding Fee (If any)
      Flood Fee
      Other Fees More Info

      Other fees could be either additional Administrative Fees that a lender charges or it could be a Flat Fee to cover all lender charges such as: (Origination Fees, Points, Underwriting and Processing Fees, Credit Reports and Tax Service Fees)

      The flat fee does not include prepaid items and third party costs such as appraisal fees, recording fees, prepaid interest, property & transfer taxes, homeowners insurance, borrower’s attorney’s fees, private mortgage insurance premiums (if applicable), survey costs, title insurance and related services.

      Total Lender Fees
      *Actual rates and other information may vary. Sponsored results shown only include participating lenders. The information you enter on this page will only be shared with lenders you choose to contact, either by calling the phone number or requesting a quote.
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      Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. The actual payment obligation will be greater if taxes and insurance are included. Click here for more information on rates and product details.
    • You can also use the FREEANDCLEAR LENDER DIRECTORY to find lenders in your state that offer the USDA home loan program

    • USDA Streamline Refinance Program Eligibility
    • We review the key USDA Streamline Refinance Program eligibility guidelines below:

      Loan Status

      Borrowers must be current on their USDA home loan and not delinquent.

      Payment History

      Applicants must have paid their mortgage on-time for twelve consecutive months immediately prior to applying for the USDA Streamline Refinance.

      Property Eligibility

      The mortgage being refinanced must be an existing guaranteed or direct USDA home loan on an owner-occupied, single-family primary residence. Properties eligible for the USDA home loan program are located in designated rural areas and small communities.

      Interest Rate

      The interest rate on your new mortgage must be less than or equal to the interest rate on your existing USDA home loan. As an added borrower benefit, USDA interest rates are typically .125% - .500% lower than the mortgage rates for most conventional mortgage programs.

      Loan-to-Value (LTV) Ratio

      Because the USDA Streamline Refinance Program does not require an appraisal report, there is no maximum loan-to-value (LTV) ratio. This is especially helpful for underwater borrowers as it can be extremely challenging to refinance an underwater mortgage.

      Please note that guaranteed USDA home loans do not require an appraisal report while subsidized direct USDA loans do require an appraisal.

      Mortgage Program

      The program only permits 30 year fixed rate mortgages. Adjustable rate mortgages (ARMs) and interest only mortgages are not eligible for the program.

      Type of Refinance

      The USDA Streamline Program does not permit cash-out refinancings. Only rate and term refinancings are allowed.

      USDA Mortgage Insurance

      Like with the standard USDA Home Loan Program, borrowers are required to pay an up-front and ongoing USDA mortgage insurance premium, also called a guarantee fee. Similar to private mortgage insurance (PMI) for conventional mortgages and the FHA mortgage insurance premium (MIP) for FHA mortgages, the ongoing USDA mortgage insurance premium is an additional cost to borrowers on top of their monthly mortgage payment. USDA mortgage insurance protects lenders in the event that borrowers default on their loan.  As of October 1, 2016, the up-front USDA insurance fee is 1.0% of the mortgage amount and the ongoing insurance fee is 0.35% of the mortgage amount.

      Prepayment Penalty

      There is no prepayment penalty on USDA home loans.

      Flood Insurance

      For properties located in federally-designated flood zones, borrowers are required to obtain flood insurance.

    • USDA Streamline Refinance Program Borrower Qualification Requirements
    • As outlined below, the USDA Streamline Refinance Program has fewer borrower qualification requirements as compared to a standard mortgage refinance.

      Borrower Credit Score

      Applicants are not required to submit a credit report or score making the program ideal for borrowers who have experienced a drop in their credit score. Usually borrowers with lower credit scores pay a higher mortgage rate but this does not apply to the USDA Streamline Program.

      Borrower Debt-to-Income Ratio

      The program does not apply a maximum borrower debt-to-income ratio which helps borrowers who have experienced a decrease in their monthly income or increase in monthly debt expense. Not applying a debt-to-income ratio means more borrowers can qualify for a Streamline USDA Refinance.

      Ability to Repay Loan

      Although the USDA Streamline Program does not require a credit report or apply a borrower debt-to-income ratio limit, lenders are required to verify that borrowers have the financial ability to repay the loan. This is usually accomplished by reviewing the borrower’s on-time payment history and applying guidelines similar to the Qualified Mortgage (QM) criteria to ensure that borrowers can afford and repay their mortgage.

      Income Limits

      Because the program does not use borrower debt-to-income ratios, borrower income limits also do not apply. This feature may be helpful for borrowers whose income has increased since they obtained their original mortgage as the standard USDA home purchase and refinancing programs apply maximum borrower income limits.

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