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USDA Mortgage Refinancing: Understanding Your Options

Calculator with wooden house and coins stack and pen on wood table representing a USDA mortgage refinanceUSDA home loans can be hugely advantageous for those looking to purchase homes in rural areas throughout New York State. 

Because they deliver 100% financing to people who meet the eligibility requirements, and offer a number of other benefits – including low monthly mortgage insurance, flexible credit score requirements and the possibility of rolling closing costs into the mortgage – they’re an especially great option for first time home buyers! 

If you’ve obtained a USDA loan and you’re interested in further lowering your rate, a USDA mortgage refinance could be a great option to consider. 

Refinancing a USDA Home Loan

There are a number of USDA mortgage refinancing options: USDA streamline refinance, USDA streamline-assist refinance and USDA non-streamline refinance. We explore each of these below so you can determine which one may be best for your specific scenario.

USDA Streamline Refinance

A USDA streamline refinance enables homeowners with USDA loans who meet the established requirements and have been current on their payments for the past 12 months to refinance without obtaining a new home appraisal. They also provide the option to add or remove borrowers from the loan.

USDA Streamline Refinance Eligibility Requirements

The requirements for a USDA streamline refinance include: 

  • You must already have a USDA mortgage, and that mortgage must be the one you are intending to refinance
  • Your existing USDA loan must have closed at least 12 months before you initiate the refinance process
  • Your USDA mortgage must be current for the 180 days prior to the refinance request 
    • Note: In order to refinance without obtaining a new appraisal, you must be current on payments for 12 months 
  • You must still meet the USDA home loan income and credit eligibility requirements
  • The maximum loan amount for your refinance cannot exceed the original loan amount
  • The home you are refinancing must be your primary residence

USDA Streamline-Assist Refinance

The USDA streamline-assist refinance does not require a new home appraisal (unless you’re refinancing a USDA direct loan), and it does not require a credit check or a review of debt-to-income ratios for those applying. This option is also ideal for borrowers with little to no equity in their homes. For this reason, it’s considered to be one of the most favorable USDA refinance options for home buyers, if they meet the established eligibility requirements. 

It’s worth noting that with this type of refinance, borrowers can be added to the mortgage but they cannot be removed.

USDA Streamline-Assist Refinance Eligibility Requirements

The requirements for a USDA streamline-assist refinance include:

  • You must already have a USDA mortgage, and that mortgage must be the one you are intending to refinance
  • You must meet the USDA home loan income eligibility requirements
  • Your USDA mortgage must be current for the 12 months prior to the refinance request
  • The refinance must result in a monthly payment reduction of $50 or more
  • The home you are refinancing must be your primary residence

USDA Non-Streamline Refinance

This USDA home loan refinancing option is quite similar to the USDA streamline refinance option. The main difference is that you will be required to obtain a new home appraisal. 

If you’d like an updated appraisal on your home, or you’d like to avoid having to meet the $50 minimum payment reduction requirement of the USDA Streamline-Assist Refinance option, a USDA Non-Streamline Refinance may be a good option for you. 

USDA Non-Streamline Refinance Eligibility Requirements

The requirements for a USDA non-streamline refinance include:

  • You must already have a USDA mortgage, and that mortgage must be the one you are intending to refinance
  • Your existing USDA loan must have closed at least 12 months before you initiate the refinance process
  • Your USDA mortgage must be current for the 180 days prior to the refinance request 
  • You must still meet the USDA home loan income and credit eligibility requirements
  • The home you are refinancing must be your primary residence

Considering a USDA Home Loan Refinance? We Can Help!

Refinancing your home can be a very beneficial move. If you’re interested in refinancing your current USDA home loan, the team at Maple Tree Funding can help! 

Our mortgage professionals will help you determine whether you’re eligible for a USDA mortgage refinance and help you figure out which refinancing option might be right for you.

We’ll take a close look at your specific situation and present you with options to consider, then guide you every step of the way as you work towards your refinance. 

Ready to get started? Give us a call today at 518-782-1202 or contact us online to connect with our local mortgage professionals who can help you get the refinance process rolling.

Not currently in a USDA loan but still interested in refinancing? Learn more about our other refinancing options here.

Interested in learning more about USDA home loans? Be sure to check out our Guide to USDA Home Loans here for details on the advantages of USDA mortgages, information about eligibility and more.

Posted in Guide to USDA Home Loans on Monday, November 8, 2021 by Maple Tree Funding