USDA Streamline Refinance: No Credit Score or Appraisal

Since the beginning of 2014, mortgage rates have been declining. The median average 30 year fixed rate mortgage has dropped 60 basis points since the start of the year.

With USDA mortgage rates dropping below conventional loan rates by as much as a one-quarter percent point or more. The USDA-backed refinancing is growing rapidly.

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The popular USDA streamline Refinance Program is now covering over 34 States providing thousands of U.S. homeowners easier access to refinancing with no appraisals and unlimited-LTV Refinance.

In most cases homeowners can save up to 35% on their mortgage refinancing and their are still close to half a million eligible homeowners across the U.S. for the USDA streamline Refinance Program.

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USDA streamline Refinance

Getting to Know the USDA Streamline Refinance Program

The program started out as a pilot project for homeowners who possessed a USDA home loan. The program went public back in 2012.

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The goal of this program was to match similar streamline programs such as FHA Streamline Refinance from the FHA, the VA Streamline Refinance (IRRRL) from Veteran Affairs and the HARP Program which got recently extended from Fannie Mae and Freddie Mac.

The term “streamline” really means to reduce the formal barriers to qualifying and to make the underwriting aspect much faster than conventional financing, and closings can typically be scheduled within three weeks of the start of the loan application.

What makes the USDA loans close so quickly is because the agency enforces minimal eligibility requirements:

  • Refinancing your home must be mortgaged via the USDA Direct Home Loan or USDA Guaranteed Home Loan
  • The home must be your primary residence
  • You need to have twelve previous on-time mortgage payments

It’s that simple to qualify, no-one will bother you with appraisal appointments or home inspection requests.

A 640 credit score is required for the USDA Streamline Refinance Program and the loan-to-value is not a factor in the decision making process. Underwater homeowners can benefit from the program just as easily as a homeowner with 20% home ownership can. 

USDA Streamline States that Qualify

At the introduction of the USDA Streamline Refinance program the government agency responsible for the program limited its geographical reach to specific states that were most impacted from the economic downturn.

The agency responsible for the new program wanted to make sure that the program would work and identify any issues that could be adjusted before they expanded the program to other states.

The agency focused on 19 states selected by the USDA that were most affected by the previous recession back in 2009. Those states for the pilot program were Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oregon, Rhode Island, South Carolina and Tennessee.

The initial program was a major success and helped many homeowners gain access to low mortgage rates and payment relief to USDA-backed households. After such resounding success the program got expanded to Alaska, Arkansas, Colorado, Idaho, Kansas, Missouri, Montana, North Dakota, Oklahoma, South Dakota, Texas, Utah, Washington, West Virginia, Wisconsin and Puerto Rico.

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Now Homeowners in these states can apply for the USDA Streamline Refinance today. Want to check if a property may be eligible? Visit the USDA Eligibility Website to find out.

USDA Streamline Considerations Before Applying

The USDA has done a remarkable job at removing most of the qualification standards, but their remains some program guidelines that you should be made aware of before applying for refinancing under the program.

Some things to consider with all USDA home loans and streamline refinancing is standard up-front loan fees, USDA guarantee fees that are required annually. You may already be paying these fees if you currently hold a USDA home loan.

Other considerations that you should be aware of:

  • 30 Year Terms Only – no 20 or 15 year terms are permitted
  • If you are in a floodplain you will need Flood Insurance
  • The pilot program requires that your loan drops by 1% point or more
  • USDA Streamline Refinance Program is a rate-and-term refinance program only
  • Cash-out mortgages are not permitted
  • Loan Consolidations of a first or second lien (e.g. HELOC) are not permitted

All of the streamline programs follow similar considerations so it is best to discuss the details with a licensed mortgage advisor. 

Say Hello to an Easier Mortgage Refinancing Experience

There are always opportunities to refinance and save substantial money. The USDA Streamline Refinance Program makes it simple to check your eligibility and get closed on a new, lower-rate mortgage in less than a few weeks.

Speak to a Mortgage Advisor Call 404-238-7888 , or fill out your quick quote form to get your USDA Streamline Refinancing started today! 

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