USDA Streamlined Refinancing

DEFINITION of 'USDA Streamlined Refinancing'

A mortgage-refinancing option offered by the United States Department of Agriculture (USDA). USDA streamlined refinancing is available to homeowners who purchased their home using a Section 502 loan, which is a loan 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 Streamlined Refinancing'

USDA 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. The USDA does not require an appraisal on a streamline refinance, but does require a credit report to be available.

The property being refinanced must be the borrower’s primary residence, but does not have to be located in a currently eligible rural area. Homeowners do not qualify if they are refinancing a loan offered by the FHA, VA, Fannie Mae or Freddie Mac.

The phrase “streamline refinance” refers to the reduced amount of paperwork and underwriting that the lenders must work with.

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RELATED FAQS
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    Federal Housing Administration (FHA) loans require escrow accounts for property taxes, homeowners insurance and mortgage ... Read Full Answer >>
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