DEFINITION of 'USDA Non-Streamlined Refinancing'

A mortgage refinancing option offered by the United States Department of Agriculture (USDA). USDA non-streamlined refinancing is available to homeowners who purchased their home using a Section 502 Direct or Guaranteed loan. These are loans made available to low-income individuals and households in rural areas. The refinancing option is available in all U.S. states and territories.

BREAKING DOWN 'USDA Non-Streamlined Refinancing'

Unlike loans made under the USDA streamlined refinancing program, non-streamlined refinancing mortgages require that the property be appraised. In addition to the principal balance, a non-streamlined refinancing loan can include guarantee fees, accrued interest, lender fees and closing costs if the appraised value of the home is greater than the principal loan amount. However, unpaid fees cannot be included.

USDA non-streamlined refinancing is for a fixed-rate loan with a 30-year term. The interest rate must be lower than the interest rate of the loan being refinanced. A credit report is required. Homeowners do not qualify if they are refinancing a loan offered by the FHA, VA, Fannie Mae or Freddie Mac.

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