Updated January 2017
Does the USDA loan program have a “streamline refinance” that is similar to the FHA streamline or the VA streamline program?
They are testing one out – The USDA streamline refinance.
The USDA streamline refinance pilot program was announced in 2012 and is estimated to be helping USDA loan holders across the nation. The USDA streamline program, known as streamlined-assist has become a permanent program feature.
USDA Streamline Refinance Pilot Program: Guideline Highlights
The USDA pilot program, now known as the streamlined-assist program, is for people who currently have a USDA loan and are looking for the easiest way to refinance their USDA loan. The general guidelines include:
- It is only available for an existing USDA rural home loan.
- The new interest rate must be a fixed rate that is at least 1% below the loan’s current USDA interest rate
- All USDA Streamline Refinance loans are only available for a 30 year fixed rate
- No appraisal, no credit, and no income documentation required
- Some lenders may require a property inspection to ensure that the property is still in line with all USDA housing guidelines
- Must be manually underwritten and not processed through the guaranteed underwriting system
- Can have multiple closing cost options as long as they are “reasonable and customary”
- USDA income guidelines and restrictions still apply
USDA Streamline Frequently Asked Questions
With any loan program, there are bound to be questions. Be sure to check back often as we will update with more information as we get it.
Can you get cash back or cash out in the program?
No. You can only get cash back for eligible loan costs that you have advanced personal funds for.
Is an appraisal required?
Maybe. It depends on whether the loan has received subsidy or not. Check with your loan officer for more details – but the general guideline is: No appraisal required for direct loans to guaranteed loans that have never received subsidy. Yes, an appraisal is required for loans that have received subsidy. The reason for the appraisal is for the purpose of calculating the subsidy recapture.
What is the interest rate?
The interest rate on a USDA streamline is required to be a fixed rate loan that is priced at a minimum of 100 basis points below the current interest rate on the loan. So if your current loan is at 6%, your new loan must be at 5% or lower.
What are the fees for the USDA streamline?
The fees will vary between lenders. Lenders can charge “normal and customary” closing costs – which means that you need to shop multiple lenders in order to get the best deal.
What is the minimum credit score required?
For the program, lenders only need to verify that the last 12 mortgage payments have been made on time and do not need to verify a credit score.
Can someone be added or deleted to the loan during the process.
Generally speaking – no. An exception is if someone on the loan has deceased, then they can be removed from the loan.
Is the program available in all states?
Currently, yes. The program in its pilot stage was available only in: AK, AL, AR, AZ, CA, CO, FL,GA, ID, IL, IN, KS, KY, MI, MO, MS, MT, ND, NV, NJ, NM, NC, OH, OK, OR, RI, SC, SD, TN, TX, UT, WA, WI, WV.
USDA Streamline Refinance: Get The Best Deal
Getting the best deal on your refinance is easy – shop multiple lenders for the best rates and fees. The USDA streamline is the same way – get the best deal by shopping multiple lenders and see who can give you the best possible interest rate and fees. Get a free USDA streamline quote right here today!Ask our lenders about your mortgage options today.