USDA Rural Housing Service Administrator Tony Hernandez today announced a series of changes that will make it faster and cheaper for homeowners to refinance USDA Rural Development mortgages.
“These changes reaffirm the Obama Administration’s commitment to middle-class Americans, and I am pleased that we continue to provide affordable housing to support thriving economies in rural communities,” Hernandez said. “Helping homeowners refinance their homes to reduce their monthly payments and take advantage of low interest rates will bring increased capital to rural residents and the communities where they live and work.”
USDA Rural Development State Director Virginia Manuel said, “I am pleased that Maine families and individuals have this opportunity to refinance through USDA Rural Development, ultimately helping them to have more money in their pockets and more to save for the future.”
To date in Maine this Fiscal Year, USDA Rural Development has assisted 886 Maine families or individuals to become homeowners through its Single-Family Housing Guaranteed and Direct Loans, for a total investment of $128.2 million.
The changes take effect June 2, 2016 and apply to mortgages issued through USDA and those where USDA has issued a loan note guarantee.
Homeowners current on their mortgages for the past 12 months will no longer be required to secure an appraisal, provide a credit report or undergo a debt-to-income calculation when they refinance for a 30-year term. These changes will save time and money.
USDA began testing these changes in a 2012 a pilot program that was later expanded to include 34 states and Puerto Rico. To date, nearly 9,500 homeowners have refinanced their mortgages. Some borrowers saved as much as $600 a month. The average savings is around $150 per month.
The streamlined rules are consistent with banking industry lending standards. These refinanced loans, like all USDA Rural Development housing loans, meet rigorous underwriting standards and are made only to qualified borrowers. The Department of Housing and Urban Development and Department of Veterans Affairs have similar programs for the Americans they serve.
Interested homeowners with USDA loan guarantees should contact their lender about refinance procedures. Homeowners with USDA Direct loans should contact a USDA housing specialist.
For additional details on these new changes, please see page 26461 of the May 3 Federal Register. To learn more about USDA housing programs, please contact a housing specialist at your nearest USDA Rural Development office. A list of State offices is available at: http://www.rd.usda.gov/contact-us/state-offices.
Since 2009, USDA Rural Development nationwide (#USDARD ) has helped 1.1 million rural residents buy homes; invested $11 billion to start or expand 103,000 rural businesses; funded nearly 7,000 community facilities such as schools, public safety and health care facilities; financed 185,000 miles of electric transmission and distribution lines; and helped bring high-speed Internet access to nearly 6 million rural residents and businesses. For more information, visit www.usda.gov/results.
USDA Rural Development has Area Offices located in Presque Isle, Bangor, Lewiston, and Scarborough, as well as a State Office, located in Bangor. There are 54 employees working to deliver the agency’s Housing, Business, and Community Programs, which are designed to improve the economic stability of rural communities, businesses, residents, and farmers, and improve the quality of life in rural Maine. Further information on rural programs is available at a local USDA Rural Development office or by visiting USDA Rural Development's web site at http://www.rd.usda.gov/me.