The U.S. Department of Agriculture (USDA) is launching a two-year pilot program to help rural borrowers refinance their mortgages to reduce their monthly payments.
The new Single Family Housing Guaranteed Rural Refinance Pilot Program will operate in 19 states for homeowners who have loans that were made or guaranteed by USDA Rural Development. To be eligible under this pilot, borrowers must have made their mortgage payments on time for 12 consecutive months. They do not have to obtain new credit reports, property inspections or home appraisals. Refinanced loans must be at rates below the original interest rate. Terms cannot exceed 30 years, and no cash-out is permitted to the borrower.
‘This pilot program will help homeowners to take advantage of historically low interest rates, and by working closely with lenders, we are helping rural homeowners protect one of the most important investments they will ever make,’ says Agriculture Secretary Tom Vilsack.
USDA Rural Development estimates 235,000 homeowners will be eligible to refinance their loans, which is expected to save them considerable time and money. The pilot is open to homeowners in 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 performance of the pilot will be reviewed after two years to evaluate whether to continue it, terminate it or make it permanent.