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Unlike a typical loan application, there are no credit report, home appraisal, or property inspection requirements. Current income is not a qualifying factor either. The borrower must only document that their income falls within current USDA limits.54

Another refinancing program includes the USDA standard streamline program. Similar to the streamlined-assist program, no appraisal is required, and homeowners that are underwater on their mortgage are eligible, which follows generally the same rules as the streamlined-assist loan.3

However, homeowners have to provide proof of current income and meet certain debt-to-income requirements. Benefits of this particular option include no requirement to drop the payment by at least $50, and existing borrowers listed on the note can be removed as long as one of the original borrowers remains on the loan. The latter can be beneficial in the case of divorce.3

USDA Streamlined Refinancing Rates

To refinance a guaranteed loan, check out the USDA's list of approved lenders. They offer USDA loans, but the USDA does not recommend specific lenders. You'll need to shop around to make sure you're getting the best terms and a lower interest rate.1

The interest rate for direct loans as of Oct. 1, 2021, is 2.5%, but your effective rate can be as low as 1% after subsidies.6

What Loan Refinancing Options Does the USDA Offer?

The USDA offers direct loans and guarantees loans issued by private lenders to low- and moderate-income borrowers in rural areas. It oversees two programs to refinance these loans—streamlined-assist and standard streamlined.

What Are the Requirements to Refinance a USDA Loan?

Under either program, the home to be refinanced must be a primary residence and have a mortgage from a USDA direct or guaranteed home loan, among other requirements. Neither requires a home appraisal or inspection. However, qualifying for a standard refinance is harder. For example, in contrast to streamlined-assist refinancing, standard streamlined refinancing takes into account debt-to-income (DTI) ratios.2

What Are the Benefits of USDA Streamlined Refinancing?

Streamlined refinancing offers a hassle-free way to refinance a USDA mortgage. The main benefit is lower loan payments.