DEFINITION of 'USDA Rural Refinance Pilot Program'

A mortgage-refinancing option offered in some states and territories by the United States Department of Agriculture (USDA). The USDA rural refinance pilot program 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.

BREAKING DOWN 'USDA Rural Refinance Pilot Program'

Homeowners looking to refinance a guaranteed loan do not need to have their home appraised, but those who have direct loans do need to have an appraisal. In addition to the principal balance, guarantee fees, accrued interest and lender fees may be included. Lenders may also charge an origination fee.

Unlike with USDA streamlined and non-streamlined refinancing, the rural refinance pilot program does not require a credit report. Instead, homeowners must show that they have made their mortgage payments for the previous 12 months. The interest rate charged on the new loan is at a fixed rate at least 100 basis points below the interest rate on the current loan.

RELATED TERMS
  1. USDA Streamlined Refinancing

    A mortgage-refinancing option offered by the United States Department ...
  2. USDA Non-Streamlined Refinancing

    A mortgage-refinancing option offered by the United States Department ...
  3. USDA

    A department of the United States government that manages various ...
  4. No-Appraisal Loan

    A mortgage that does not require an appraisal of the property’s ...
  5. Rural Housing Service - RHS

    An administrative division within the U.S. Department of Agriculture ...
  6. RHS Loan

    A loan made by or guaranteed by the United States Department ...
Related Articles
  1. Personal Finance

    5 Mortgage Loans You Didn't Know About

    These lesser known mortgage loans are often overlooked by potential home buyers.
  2. Personal Finance

    7 Bad Reasons To Refinance Your Mortgage

    When low mortgage rates are everywhere, it might seem like a good time to refinance. Make sure you are doing it for the right reasons.
  3. Personal Finance

    9 Things To Know Before You Refinance Your Mortgage

    Whether or not a mortgage refinance is right for you depends more on individual circumstances than this week's mortgage interest rates.
  4. Personal Finance

    Before you Buy that Home: Shop for the Best Loan

    Before even starting to search for a home, the first thing you need to do is get pre-qualified for a home mortgage.
  5. Personal Finance

    Mortgage Fees That Can Trash Your Refinance Deal

    Before deciding that refinancing your mortgage at a lower interest rate is a good deal, factor all the fees into your calculations.
  6. Personal Finance

    Should You Refinance Your Mortgage When Interest Rates Drop?

    Refinancing is a great way for many homeowners to improve their financial situation - but beware of the downsides.
  7. Personal Finance

    When (And When Not) to Refinance Your Mortgage

    There are both good and bad reasons to refinance. Learn more about both here.
  8. Investing

    How to Get A No-Down-Payment Mortgage

    There are many programs offering no-down-payment home loans to qualified homebuyers.
  9. Personal Finance

    How to Lower Refinance Closing Costs

    Refinancing a mortgage can save you money but it isn't free. There are closing costs associated with a refinance and how much you pay for them depends on you.
  10. Personal Finance

    Student Loan Refinancing: The Pros and Cons

    To refinance your student loan or not? Here are the top pros and cons to consider.
Hot Definitions
  1. Protectionism

    Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local ...
  2. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  3. Demonetization

    Demonetization is the act of stripping a currency unit of its status as legal tender and is necessary whenever there is a ...
  4. Investment

    An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic ...
  5. Redlining

    The unethical practice whereby financial institutions make it extremely difficult or impossible for residents of poor inner-city ...
  6. Nonfarm Payroll

    A statistic researched, recorded and reported by the U.S. Bureau of Labor Statistics intended to represent the total number ...
Trading Center