East Lansing, Michigan, May 31, 2012 -- Deputy Under Secretary for Rural Development Doug O’Brien today encouraged rural Michigan residents with current USDA home loans to take advantage of a pilot refinancing program which could reduce their payments. O’Brien is conducting a series of meetings in Michigan this week. Agriculture Secretary Tom Vilsack announced establishment of the pilot program earlier this year.
“Since the creation of the USDA Guaranteed Home Loan program, USDA has helped more than 54,000 rural Michigan residents purchase houses,” O’Brien said. “This pilot refinancing initiative helps people keep their homes and avoid financial hardship. I encourage any USDA homeowner who is eligible to explore this simplified refinancing program.”
USDA has launched a two-year pilot project in Michigan and 18 other states to enable homeowners with mortgages written or backed by USDA Rural Development to save money by refinancing their loans at today’s historically low interest rates.
Existing Rural Development borrowers eligible for the pilot refinance program are not required to obtain new appraisals, property inspections or credit reports. The new interest rate for the refinance must be a fixed rate at least 1 percentage point below the current interest rate. The term cannot exceed 30 years. No cash-out is permitted to the borrower. Complete details concerning eligibility are available at any USDA Rural Development office.
Homeowners who meet these criteria may refinance their Rural Development guaranteed loans regardless of the loan-to-value ratio for the property. This enables borrowers who owe more on their mortgages than their homes are worth to get lower interest rates and reduce their monthly mortgage payments.
“The pilot program can help stabilize neighborhoods and prevent the disruption and loss caused by home foreclosures,” USDA Rural Development Michigan State Director James Turner said. “The goal is to help residents keep their homes and meet their obligations by giving them some financial breathing room.”
Rural Development will evaluate the pilot after two years.
USDA, through its Rural Development mission area, administers and manages housing, business and community infrastructure and facility programs through a national network of state and local offices. These programs are designed to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural America. Rural Development has an existing portfolio of more than $165 billion in loans and loan guarantees. Visit http://www.rurdev.usda.gov for additional information about the agency’s programs or to locate the USDA Rural Development office nearest you.
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