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.

RELATED TERMS
  1. No-Appraisal Refinancing

    A type of mortgage for which the lender does not require an independent, ...
  2. No-Appraisal Mortgage

    A type of home loan used for refinancing for which the lender ...
  3. Interest Rate Reduction Refinance ...

    A mortgage refinancing program offered by the U.S. Department ...
  4. Future Advance

    A clause in a mortgage which enables the lender to advance funds ...
  5. BOGO Loan

    A lending scheme in which a financial institution or other lender ...
  6. Foreclosure Buyout

    A refinancing program that allows a homeowner to avoid foreclosure ...
Related Articles
  1. Investing

    When Does It Pay to Refinance Your Mortgage?

    Mortgage interest is among a homeowner’s biggest expenses, so refinancing is a popular way to lower costs, but it doesn’t always make sense.
  2. 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.
  3. Investing

    Should You Refinance Your Home if You're Over 50?

    Whether you should refinance your mortgage or not depends on your savings but for people over the age of 50 there are other specific factors to consider.
  4. 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.
  5. Personal Finance

    How Mortgage Refinancing Affects Your Net Worth

    Find out how to determine whether refinancing will put you ahead or even more behind.
  6. Personal Finance

    5 Mortgage Loans You Didn't Know About

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

    Refinancing Student Loans: 5 Questions to Ask

    Refinancing can be a great way to consolidate your student loans, but there are lots of questions you'll need to ask yourself before you start the process.
  8. 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.
  9. Investing

    Difference Between Restructuring and Refinancing

    Refinancing and restructuring are very different debt reorganization processes to improve finances and avoid bankruptcy.
  10. 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.
RELATED FAQS
  1. Can FHA loans be refinanced?

    Learn whether an FHA loan can be refinanced, find out what types of FHA loan refinancing are available and understand the ... Read Answer >>
  2. How do I know if I should refinance my mortgage?

    If you can reduce your current interest rate by 0.75-1% or higher then it might make sense to consider a refinancing move. ... Read Answer >>
  3. Are FHA loans fixed?

    Learn more about Federal Housing Authority (FHA) loan programs, the requirements for qualifying and how such loans can be ... Read Answer >>
  4. Does an FHA loan require a down payment?

    Learn about Federal Housing Administration (FHA) loans, which have down payments as low as 3.5%, low closing costs and lower ... Read Answer >>
  5. Are secured personal loans better than unsecured loans?

    Read about the differences between secured loans and unsecured loans and how they are used. Learn about forms of collateral ... Read Answer >>
Trading Center