What is a USDA Streamline Refinance Loan?
The USDA Streamline Refinance Loan is an option for people who already have a USDA home loan for the purpose of lowering their interest rate. It was designed to emulate the successful VA Interest Rate Reduction Refinance Loan (VA IRRRL) and other popular streamline refinance loans.
What Are The Benefits?
The benefit is a streamlined process that makes getting your refinance easier. Since you already have a USDA home loan, you have already qualified, so it’s unnecessary to require redundant documentation. The streamlined process shortens the time to close on the loan and requires less paperwork. Additionally, property inspection is not required and closing costs can be absorbed into the financing, requiring less money upfront.
What Are The Eligibility Requirements?
To qualify for a USDA Streamline Refinance Loan, you must meet certain criteria as defined by the USDA:
- The mortgage that is being refinanced needs to be a USDA home loan
- The mortgage that is being refinanced needs to be current and not delinquent
- The refinance needs to result in the lowering of the borrower’s monthly payment and interest payments
- No cash may be taken out of the mortgage to pay for anything other than the existing loan
Home Improvement Financing?
If you are refinancing to make home improvements and have a USDA Rural Home Loan, the USDA program requirements allow for financing of up to 102% of the appraised value of the home. This way you are able to pay for improvements that can occur after the loan closes.