Understanding the Streamlined Assist Refinance USDA Loan
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The USDA streamlined assist refinance program lets eligible homeowners refinance their existing USDA loans without undergoing a credit check, getting a home inspection or having their debt-to-income ratio calculated.
The program is available to homeowners with USDA guaranteed loans, which are backed by the U.S. Department of Agriculture but provided by approved lenders, and USDA direct loans, which are issued by the USDA's Rural Development Guaranteed Housing Loan Program.
Here's what you need to know if you have a USDA loan that you're looking to refinance.
» MORE: The basics of USDA loans
How to qualify for a USDA streamlined assist refinance
In order to refinance through the streamlined assist program, you'll need to meet the following USDA requirements:
Have paid your current USDA mortgage on time for at least 12 months before refinancing.
Reduce your monthly payment by at least $50 by refinancing.
Be within the USDA's single-family housing income limits, which vary by location and the size of your household.
Be one of the original borrowers. You can add a new borrower to your loan, but you can't typically remove any of the existing borrowers. (For example, if you were divorcing and needed to remove one partner from the mortgage, you couldn't do it with a streamline assist refinance.)
Choose a new loan term of 30 years or less.
Get a new loan rate that’s fixed and lower than your existing rate.
Also, if you live in an area that's become more developed and is no longer deemed "rural" by current USDA eligibility guidelines, you can still refinance your USDA loan with the streamlined assist program.
» MORE: See top refinance lenders
What are the benefits of a USDA streamlined assist refinance?
A streamline assist refinance has fewer hoops to jump through than a regular rate-and-term USDA refinance. With a USDA streamlined assist refinance:
Your lender won’t require a new appraisal.
You don't need a credit check, and the lender doesn't have to calculate your debt-to-income ratio, or DTI.
You don’t need a home inspection.
Aside from requiring less paperwork, the USDA streamlined assist refinance boasts the same primary benefit of most non-cash-out refinances, lowering your monthly USDA loan payment.
How much does a USDA streamlined assist refinance cost?
Because refinancing replaces your existing mortgage with a new one, you will still pay some closing costs, including a new USDA guarantee fee and annual fee. With a USDA streamlined assist refinance, you can roll the closing costs into your loan.
Ready to get started? Begin by finding a USDA-approved lender. You don't have to refinance through your current lender; in general, it's a good move to get quotes from at least three lenders so that you can compare your monthly and total costs, and find the best deal.
» MORE: USDA home loan calculator
