If you purchased a home using the USDA home purchase program, you are eligible for a USDA home streamline refinance. The USDA has set aside a specific amount of money to fund USDA mortgage loans in each USDA qualifying area. Homeowners may qualify to use these funds to refinance their current USDA mortgage. However, there are certain restrictions that apply to this program.
The borrower must meet certain income-eligibility requirements. Applicants must not have had any defaults during the 12 months prior to the refinance loan application. With the streamlined-assisted option, there is no debt-to-income calculation requirement, no property inspection, no loan-to-value requirement and no appraisal prerequisite, except for the direct loan borrowers who have received a subsidy. The interest rate of the new loan must be fixed and it cannot exceed the interest rate of the original loan being refinanced. The loan security must include the same property as the original loan and be owned and occupied by the borrowers as their principal residence.