USDA Rural Pilot Refinance Incentive

Mortgage and Lending with USDA / FHA Mortgage Source

Florida homeowner that currently have a USDA mortgage on their house might be eligible to refinance into a lower interest rate. Everyone knows that historic low interest rates are here. The USDA loan refinancing program gives existing USDA Rural homeowners an excellent opportunity to refinance their loan and receive a lower monthly mortgage payment. The new USDA refinance Pilot programs permits homeowners to refinance their USDA loan regardless of equity or if they are underwater on value. 


Let's say Mr. Homeowner originally purchased his home in 2007 for $190,000. At that time Mr. Homeowner did a 100% financing USDA loan with no money down. Mr. Homeowner currently owes around $175,000 on this same house today. The problem is that the home is only worth $120,000 in today's market. In this example Mr. Homeowner would be ok to refinance his USDA loan, even though his home has lost significant value.

If you do have equity, the USDA refinance program does not allow you to take any cash out on your home. While the USDA refinance program doesn't allow you to put any cash back in your pocket, it is a streamline easy process that can possibly save you thousands of dollars over the like of your mortgage. 

Here are the basic requirements and guidelines to refinance your USDA mortgage: 

  1. You must currently have a USDA or Rural Housing mortgage.  Regardless of your current mortgage servicer (Chase, Bank Of America, Regions, Nationstar, etc) we can help! 
  2. No mortgage late payments in the last 12 months.
  3. Mobile or Manufactured home are NOT permitted.
  4. The new term of the USDA refinance must be 30 years fix mortgage.
  5. The upfront USDA guarantee fee is 2% (as of Oct 2012) which will be roll into the new loan.
  6. The applicable USDA annual/monthly fee will be .50% (as of October 2014) 
  7. The new loan may include the principle balance of the existing loan plus the upfront USDA guarantee fee of 2% and ALL closing costs.
  8. No cash out is permitted with the USDA refinance program.
  9. Income eligibility verification for ALL adult household members is required for USDA income eligibility only, not for determining repayment ability. This is important and seems to be the primary barrier for homeowners looking to refinance their USDA loan. Please be sure your household income is under the limit for your county – current  USDA household income limits can be found here
  10. Borrowers must be employed at the time of closing on the refinance transaction or have alternate sources of income, such as retirement income, social security income, disability income, alimony, or child support.
  11. No loan to value cap. No restrictions for home owners that are "upside down" and have seen their home value decrease in recent years. No new appraisal or home inspection is needed!

Additionally, even if your property address is no longer in a USDA eligible area, you are still eligible to refinance your loan! The USDA refinancing program is an excellent opportunity for current USDA mortgage holders to take advantage of today's historic low interest rates and secure lower, more affordable monthly mortgage payments. Commonly asked USDA Rural Development refinance questions can be found here

Homeowners in Florida are encouraged to call 904-302-6060 or visit for more information.

Serving all of Alachua County including Gainesville, Archer, Newberry, Waldo, High Springs. 



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