USDA Refinance
Best For: Limited Equity, Rate Reduction, Zero Down, Easy Process
Refinance your existing USDA loan up to 100% of value for low to moderate income homebuyers in eligible rural areas.
Program Description
The U.S. Department of Agriculture (USDA) Loan Program is designed to help people with low to moderate incomes purchase a home located in designated rural areas across the United States and its territories. This program allows homeowners with an existing USDA rural development loan to refinance to a new USDA loan with a lower rate.
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USDA Refinance
Min. Credit Score
620
Min. Equity
0%
Max Loan Amount
$285,000 - $970,800
Qualification variables shown here are for 1-Unit Primary Residences, and loan amount ranges vary based on US County. Register Now to see if this loan program is a good fit for you, find your county limits, and find more options for purchasing a home.
Pros & Cons
- No equity in the home required (100% financing option)
- Typically lower mortgage insurance (upfront & monthly)
- Typically lower interest rates than other programs
- Household income and purchase price limits may disqualify many borrowers and properties
- Restricted to USDA areas only
- Lower debt to income ratios allowed
Program Availability
USDA Refinances are available in 50 states, Puerto Rico and the U.S. Virgin Islands.
*Limited Availability: There may be parts of this county that don’t qualify for a USDA Loan. To verify property or area eligibility, visit the official USDA website at https://eligibility.sc.egov.usda.gov/eligibility/.
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“If you are seeing USDA loan rates below your current USDA loan rate, you may be able to benefit from this program."
Occupancy & Property Types
Qualification factors for this program can vary based on how you intend to occupy the property and what type of property you are purchasing. By registering for a free account , you can check program limits for all property and occupancy types.
Occupancy Types
Available Property Types for Primary Residence
Income & Purchase Price Limits
Your Debt-to-Income Ratio (DTI), as well as purchase price and income limits, are important factors when qualifying for a home loan program. By registering for a free account , you can find the exact program limits for this program and others in your area and for your unique scenario.
Debt-to-Income Limit
41.00%
Purchase Price Limit
$285,000 - $970,800
Income Limit
$91,900 - $238,200
Annual Household (1-2) Income
Qualification variables shown here are for 1-Unit Primary Residences, and loan limit ranges vary based on US County. Amounts may be rounded. Exact amounts can be accessed by registering for a free account.
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Key Features
- Allows for refinancing up to 100% of home's value
- Home must be located within a USDA eligible area
- This loan is guaranteed by the U.S. Department of Agriculture
Additional Conditions
- The loan being refinanced must be a Rural Development (USDA/RD) loan
- Only available for primary residences; no second homes or investment properties
- The interest rate on the new loan cannot exceed the rate on the loan being refinanced
Other Limitations
In some circumstances, there are specific requirements you must meet or homebuyer education courses you must attend in order to be eligible for the loan program.
No other program limitations
A Homebuyer Education Class is not required for this loan program.
Mortgage Insurance & Fees
Most mortgage programs require mortgage insurance when you are financing more than 80% of the purchase price or appraised value. Some programs may also have an associated funding fee, paid at the time of closing, or an annual fee. Learn all about the different fees here.
No Mortgage Insurance
This program does not require Private Mortgage Insurance (PMI).
Type: USDA Gurantee Fee
The USDA loan program requires the borrower to pay a funding fee called the "Upfront Guarantee Fee" that is equal to 1.00% of the loan amount and can be financed into the loan.
Type: USDA Annual Fee
The USDA loan charges an annual fee based on the total remaining balance of the mortgage at a .35% rate.
Estimated Closing Costs: 2%
These amounts are just an estimate. Your closing costs include things like loan origination fees, discount points, appraisal fees, title insurance, taxes, deed recording fees, and other charges.
Similar Loan Programs
If you think this home loan program may be a good fit for you, you may also want to check out the following programs that share many similarities with the current program.
USDA Purchase Loan
Best For: Zero Down, Easy Process
Home loans with up to 100% financing and lower mortgage insurance for low to moderate income homebuyers in eligible rural areas.
VA Rate-and-Term Refinance
Best For: Rate Reduction, Lowest Rates
Refinance to a lower VA mortgage rate or change your term (length) with limited closing costs and no private mortgage insurance.
Related Resources
2023 USDA Loan Guide
The U.S. Department of Agriculture is a complex, multifaceted entity that wears multiple hats. Under this umbrella is Rural Development, an agency part of USDA with the ultimate goal to help improve the economy and quality of life for Americans living in rural communities.
Read More
First Time Homebuyer Guide
Being a first-time homebuyer has its fair share of challenges. One of your biggest obstacles will be competing against other new or seasoned buyers. While bidding wars have tapered since the previous buying season, they can still occur.
Read More
A Rundown On Closing Costs and How They Affect You
It can be tricky to sift through all the figures , so we broke down what they are, how much they cost, who's responsible and how to minimize your expenses.
Read MoreVisit our Mortgage Education Center for more resources.
* Some loan programs may not be offered by all featured lenders of ReviewMyMortgage.com and qualification guidelines may vary between them. Our team makes their best effort to keep loan program information up to date. Loan programs may change without warning. ReviewMyMortgage.com does not guarantee or offer any loan products. ReviewMyMortgage.com is strictly an educational resource hub for consumers
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