SINGLE FAMILY GUARANTEED RURAL REFINANCE PILOT
Link to News Release Announcing the Pilot Program Expansion
WHO IS ELIGIBLE:
Current Section 502 Direct and Guaranteed loan
borrowers may be eligible to refinance their existing mortgage loans into new
Guaranteed loans through the Rural Refinance Pilot program. In addition to the
original 19 states that were eligible for the pilot program, 16 additional
states identified by the National Rural Housing Coalition as containing a very
high proportion of persistent poor counties are now eligible.
- Be a current Section 502 Direct or Guaranteed loan borrower
- Meet the applicable adjusted income eligibility limit
Reside in an eligible rural area, or an area that was eligible at the time of
original loan closing
- Have made timely mortgage payments for the previous 12 months at the time of
- The new
interest rate fixed and a minimum of 100 basis points (1%) lower
than the current interest rate
- The new
loan term must be 30 years
may be added to the new loan. Original borrowers may not be
removed unless they are deceased.
- The new
loan amount may include the principal loan balance, accrued
interest, eligible loan closing costs, pre-paids, lender fees,
escrow account establishment, and the applicable upfront guarantee
loan borrowers that owe subsidy recapture must pay the balance due
or subordinate the balance.
- The applicable annual fee applies.
- No cash out is allowed.
- A new
appraisal, credit report, HUD Handbook determinations and additional
property inspections are not required. However a new appraisal
will be required for Direct loan borrowers that received subsidy in
order to calculate subsidy recapture. Many lenders will order
a credit report in order to verify the mortgage payment history.
Rural Development does not require lenders to consider any credit
criteria other than the mortgage payment history.
HOW TO APPLY:
Applicants may apply with an approved lender of their choice that participates
in the Rural Refinance Pilot Program.
Rural Development Guaranteed Loan
Coordinator Contacts may be found on this Refinance Fact Sheet.