Home loans made through the U.S. Department of Agriculture (USDA) were designed to help interested buyers purchase property in rural areas primarily for the use of farming. Thanks to a program that has been tested in select areas since 2012, those with a USDA mortgage will now find it much easier to refinance that loan to take advantage of the current low interest rates.
This announcement was made by USDA Rural Housing Service Administrator Tony Hernandez. He stated that the program will assist homeowners with refinancing in order to provide increased capital to rural areas. Those who qualify may be able to save as much as $600 on their monthly mortgage payment, although the average saving is generally around $150. The program is currently available in 34 states and Puerto Rico. Hernandez said that about 9,500 homeowners have taken advantage of this program and refinanced to a lower rate.
To qualify, homeowners must meet the following guidelines:
- The initial mortgage must have been made through the USDA
- The homeowner must have made 12 months' worth of on-time payments
- The application must be to refinance the current loan to a 30-year mortgage
Those who qualify will be able to refinance without the need of submitting a credit report, having an appraisal done, or having their debt-to-income ratio calculated. This will speed up the refinancing process and make it cheaper since the homeowner will not have to pay for an appraisal.