@@USDA Rural Development State Director Patty Clark is encouraging rural Kansas residents with current USDA home loans to take advantage of a pilot refinancing program that could reduce their payments. USDA announced that it is adding 15 more states and the Commonwealth of Puerto Rico to a pilot program that enables current USDA home loan borrowers to save money on housing costs by refinancing their mortgages with lower interest rates.
“USDA Rural Development has helped more than 10,000 rural Kansans purchase homes through the Guaranteed Rural Housing Program in the past six years,” said Clark. “USDA’s pilot Home Refinancing Program can provide further assistance to those borrowers by taking advantage of refinancing opportunities that may reduce their monthly mortgage payments.”
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.
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. 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.
With today's announcement, the pilot is being expanded to include residents in the following states: Alaska, Arkansas, Colorado, Idaho, Kansas, Missouri, Montana, North Dakota, Oklahoma, South Dakota, Texas, Utah, Washington, West Virginia, Wisconsin, and the Commonwealth of Puerto Rico. These states are being added because they have been identified as having a very high proportion of persistent poor counties, that is, those with a poverty rate of at least 20 percent in each of the last four U.S. Censuses. The Commonwealth of Puerto Rico has been included due to a poverty rate of at least 45 percent in recent years, according to a U.S. Census Bureau report.
The original states in the two-year pilot program are: 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, terminate or make the refinance program permanent.
For more information on the pilot Home Refinancing Program, contact a Housing Specialist at a USDA Rural Development office closest to your home:
Garden City USDA RD office, (620) 275-0211, Ext. 1428, Kansas-GRH@ks.usda.gov
Hays USDA RD office, (785) 628-3081, Ext. 1446, Kansas-GRH@ks.usda.gov
Manhattan USDA RD office, (785) 776-7582, Ext. 1402, Kansas-GRH@ks.usda.gov
USDA, through its Rural Development mission area, administers and manages housing, business and community infrastructure programs through a national network of state and local offices. Rural Development has an active portfolio of more than $176 billion in loans and loan guarantees. 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.
USDA is an equal opportunity provider and employer. To file a complaint of discrimination, write: USDA, Office of the Assistant Secretary for Civil Rights, Office of Adjudication, 1400 Independence Ave., SW, Washington, DC 20250-9410 or call (866) 632-9992 (Toll-free Customer Service), (800) 877-8339 (Local or Federal relay), (866) 377-8642 (Relay voice users).