The USDA home loan program has helped many people in rural and suburban areas obtain a home. The USDA streamline assist refinance option provides current USDA direct and guaranteed home loan borrowers with low or no equity the opportunity to refinance for more affordable payment terms.
The USA offers three refinancing options: USDA streamline refinance, USDA streamline-assist and a non-streamlined refinance.
The USDA streamline refinance program was originally rolled out in 2012. As of May, 2019 the USDA streamlined refinance program is available in 50 states.
Let’s take a closer look at how this change will affect homeowners.
The USDA streamline refinance program was made available to the public in 2012. The USDA streamline refinance program however was introduced in 2017 to a limited number of states. The reasoning behind this was to test the program and solve any unforeseen issues before rolling the program out everywhere.
The states that the program was initially made available to were states that suffered the most from the last economic slump. These states included:
Once the program was deemed a success, the U.S. Department of Agriculture decided to extend the program to an additional 15 states, totaling 34 states. Now as recent as May of this year, the program has been extended to 50 states, and anyone with a USDA home loan can now use this rate reduction program.
1). USDA Streamline Refinance
The standard USDA streamline refinance is similar to the USDA streamline assist loan, but no appraisal is required.
2). USDA Streamline-Assist Refinance
This program is arguably the most popular because it requires no appraisal, no credit check, and no income qualification, and now more people will be able to utilize this program in more states.
The streamline assist program requires the borrower to capture a $50 monthly savings on their Principle/Interest/Annual Fee (taxes and insurance are purposely excluded from that calculation) and the original USDA loan must have closed at 12 months prior to the note date.
3). USDA Non-Streamline Refinance
The USDA non-streamline loan is also similar to the USDA streamline option, but borrowers are required to get a new appraisal.
Refinancing may result in higher finance charges over the life of the loan.
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