USDA Rural Refinance Pilot Program

AAA

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.

INVESTOPEDIA EXPLAINS '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. Refinance

    1. When a business or person revises a payment schedule for repaying ...
  2. Short Refinance

    The refinancing of a mortgage by a lender for a borrower currently ...
  3. Forbearance

    A temporary postponement of mortgage payments.
  4. Accessory Dwelling Unit (ADU)

    A legal and regulatory term for a secondary house or apartment ...
  5. Mortgage Modification

    A permanent change in a homeowner's home loan terms that makes ...
  6. USDA Non-Streamlined Refinancing

    A mortgage-refinancing option offered by the United States Department ...
Related Articles
  1. The Home Appraisal: Your Key to a Successful ...
    Home & Auto

    The Home Appraisal: Your Key to a Successful ...

  2. 4 Reasons Not To Refinance Your Home
    Home & Auto

    4 Reasons Not To Refinance Your Home

  3. 6 Questions To Ask Before You Refinance
    Home & Auto

    6 Questions To Ask Before You Refinance

  4. When (And When Not) To Refinance Your ...
    Home & Auto

    When (And When Not) To Refinance Your ...

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center