|(JANUARY 31, 2013) AGRICULTURE SECRETARY VILSACK ANNOUNCES EXPANSION OF REFINANCING PROGRAM TO HELP MORE RURAL HOMEOWNERS|
|Montana To Join Pilot Program To Provide Relief For USDA Borrowers|
|Bozeman, MT, Jan 31, 2013
@@Agriculture Secretary Tom Vilsack today announced that USDA is adding 15 more states and the Commonwealth of Puerto Rico to a pilot program that enables current USDA borrowers to save money on housing costs by refinancing their mortgages with lower interest rates. USDA Housing Administrator Tammye Treviño made the announcement on behalf of Secretary Vilsack.
“USDA’s expansion of this program will help more rural borrowers refinance their mortgages to reduce their monthly payments and ease their financial burdens,” Vilsack said. “As our economy continues to recover, this program will enable rural families living in USDA-financed homes to take advantage of historically low interest rates.”
USDA unveiled the initiative almost one year ago. It initially included borrowers in 19 states hardest hit by the downturn in the housing market. To date, 3,394 rural borrowers have benefited from the USDA refinancing pilot program. These loans total nearly $453 million.
Tom Atkins, Housing Director for USDA Rural Development in Montana said “We’ve originated or guaranteed thousands of home loans over the last several years, and we know some of our borrowers are facing financial challenges. This program gives them an opportunity to restructure their loan to take advantage of the better interest rates and hopefully put them on firmer financial footing.” Montana has approximately 6,500 loans in its portfolio with a balance of $900 million.
The pilot expands upon USDA’s ongoing effort to assist rural homeowners holding loans made or guaranteed by USDA Rural Development. In 2010, USDA established an aggressive modification policy for Guaranteed Loans that helps homeowners who are delinquent on their mortgages. These homeowners can lower their monthly payments through a loan modification that re-amortizes their payments over a term of up to 40 years, lowers their interest rate, or both. USDA also has a “Mortgage Recovery Advance” program in which the Department provides guaranteed lenders up to 12 months of mortgage payments on behalf of borrowers who have fallen behind on their payments due to job loss or other hardships.
Participants in the pilot refinancing program are required to meet income eligibility requirements, and must have made their mortgage payments on time for 12 consecutive months. Only borrowers participating in USDA’s Single Family Housing Direct and Guaranteed loan programs are eligible to participate. Borrowers do not have to obtain new credit reports, property inspections or home appraisals. Refinanced loans must be at least one percent below the original interest rate. Terms cannot exceed 30 years. No cash out is permitted to the borrower.
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 a portfolio of more than $176 billion in loans and loan guarantees. Visit www.rurdev.usda.gov for additional information about the agency's programs or to locate the USDA Rural Development office nearest you.