PrimeLending offers USDA Refinance Pilot Program with easier guidelines to refinance now!
Sunday, 18 March 2012 11:55
GREAT NEWS!
Effective March 12, 2012 PrimeLending will accept the USDA Rural Refinance Pilot Program!
The United States Department of Agriculture (USDA) Rural Development (RD) is now offering the opportunity for current USDA Section 502 Guaranteed borrowers to refinance their existing USDA loans through the recently announced Rural Refinance Pilot program.
The Rural Refinance Pilot program allows borrowers in 19 states to take advantage reduced documentation requirements.
PrimeLending is excited to offer and support this program introduced by the USDA, and we are pleased to assist current USDA Section 502 Guaranteed homeowners in taking advantage of current refinance opportunities.
When processing and submitting your USDA Rural Refinance Pilot loans as outlined in Administrative Notice (AN) 4615 (attached to this bulletin), the closed loan file DOES NOT REQUIRE:
A new appraisal
HUD Handbook Certifications
Any additional property inspections
However, originators and processors must be able to document that the borrower’s existing mortgage has been current for the previous 12 months. A Verification of Mortgage (VOM) for evidence of mortgage payment history is REQUIRED.
A current copy of the borrower’s credit report is required to assess the proper risk based pricing adjustments. No further review of the credit report will be required, except for review of the borrower’s credit score and mortgage history.
Other requirements of the USDA Rural Refinance Pilot program include:
The interest rate on the new loan must be a minimum of 1.00% lower than the existing USDA loan.
Pilot states: AL, AZ, CA, FL, GA, IL, IN, KY, MI, MS, NV, NJ, NM, NC, OH, OR, RI, SC and TN.
All Rural Refinance Pilot loans must be manually underwritten. GUS is not available for the Rural Refinance Pilot loans.
The new term of the refinance loan must be 30 years.
The upfront USDA guarantee fee will be 1.50%.
The applicable Annual Fee will be .30%.
The new loan may only include the principal balance of the existing loan plus the upfront guarantee fee (accrued interest, prepaid interest, closing costs, and funds required to establish an escrow account may not be financed into the new loan).
No cash out is permitted.
Reasonable and customary closing costs and other fees may be collected from the borrower by the originating lender. However, the origination fee charged to the borrower may not exceed one percent of the total loan amount. As a reminder, none of these charges may be financed into the new loan amount.
A fully executed RD Form 1980-21 “Request for Single Family Housing Loan Guarantee” is required.
Income verification for all adult household members is required for income eligibility determination. Household income is necessary for determining program eligibility only, not for determining repayment ability. Therefore, ratio waivers are not required.
PrimeLending will require all borrowers to be employed at the time of the closing on the refinance transaction or have alternate sources of income, such as:
- Retirement income
- Social security income
- Disability income
- Alimony
- Child support
What is the difference between the USDA Rural Pilot Program and a USDA Streamline Refinance?
|
Guideline |
USDA Rural Pilot Program |
USDA Streamline |
|
Credit and Income Approval |
Not Required |
Required |
|
Appraisal |
Not Required |
Not Required |
|
HUD Fee Inspector |
Not Required |
Required |
|
DTI Calculation |
Not Required |
Required |
|
Income Verification |
Required |
Required |
|
UPB and Guarantee Fee Financed |
Allowed |
Allowed |
|
Prepaid, Closing Costs, Monies for Escrow Financed |
Not Allowed |
Not Allowed |
|
Eligible States |
19 States ONLY |
All |
