Can you refinance a Kentucky Rural USDA Housing Loan?

For commitments issues on or after October 1, 2016:

USDA charges the lender, who can pass the charge to the borrower, a one-time up-front cost, which is known as a Guarantee Fee. The Guarantee Fee can be financed in addition to the maximum base loan amount. The Guarantee Fee is calculated as follows as of October 1, 2016:
PURCHASE TRANSACTION CALCULATION:

1.00% of the TOTAL loan amount for commitments issued on or after 10/1/16.
Calculation: Base loan amount divided by .99 = Total loan amount (round down to nearest dollar). Total loan is then multiplied by 1.00% to get the amount of the guarantee fee.
A Guarantee Fee & Annual Fee (monthly) Calculator can be found on the USDA training resource website.
CALCULATION FOR REFINANCE TRANSACTIONS:

1.00% of the TOTAL loan amount for commitments issued on or after 10/1/16.
Calculation: Base loan amount divided by .99 = Total loan amount (round down to nearest dollar). Total loan is then multiplied by 1.00% to get the amount of the guarantee fee.
A Guarantee Fee & Annual Fee (monthly) Calculator can be found on the USDA training resource website.
ANNUAL FEE:
All loan transactions will include an annual fee of .35%

REPAYMENT RATIOS REFINANCE

FOR BOTH GUARANTEED LOAN TO GUARANTEED LOAN AND DIRECT LOAN TO GUARANTEED LOAN:
USDA – GUS Approved
USDA – Manual Underwrite – Must meet USDA guideline maximum debt ratios of 29 & 41%–No Exceptions Allowed.

TERM OF NEW LOAN

FOR BOTH GUARANTEED LOAN TO GUARANTEED LOAN AND DIRECT LOAN TO GUARANTEED LOAN:
TERM OF THE NEW LOAN WILL BE A 30 YEAR FULLY AMORTIZED FIXED RATE MORTGAGE ONLY.

INTEREST RATE

Interest rate of the new loan must be a fixed rate.
The interest rate must be lower than the existing loan to be refinanced.
Funded buy down accounts are not permitted.
HOUSEHOLD INCOME

Total adjusted income for the household cannot exceed the moderate level for the area as established in HB-1-3555.

LOAN SECURITY

Loan security must include the same property as the original loan.
The security property must be owned and occupied by the applicants as their principal residence.
RURAL / NONRURAL AREAS

SFHGLP refinance loans are permissible for properties in areas that have been determined to be non-rural since the existing loan was made.

PROPERTY VALUATION

The value of the new mortgage loan request must be supported by a new appraisal. The loan amount cannot exceed the present market value plus the one-time 2 percent guarantee fee. The new loan amount can include closing costs or lender fees if supported by market value.
INSPECTIONS

The lender must confirm the property meets or continues to meet the current requirements of HUD Handbook 4150.2 and 4905.1.
No further inspections or repairs required by Rural Development.
Lender may require inspections or repairs. Expenses related to inspections or repairs may not be financed.
NET TANGIBLE BENEFIT

Every refinance

Kentucky USDA Rural Housing Mortgage Loans

You can refinance your existing USDA Rural Housing Loan. See details below:

unnamed-51 Can you refinance a Rural Housing Loan? The short answer is yes. See below for qualifying criteria

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KENTUCKY  USDA LOAN GUARANTEED RURAL HOUSING REFINANCE FEATURES

  • Loan must be secured by the same property as the original loan. The original loan must be Guaranteed Rural Housing (GRH) or USDA Section 502 Direct only. The Program may not be used to refinance FHA, VA, or other government or conventional mortgages.
  • Term of the new loan will be 30 years.
  • Interest rate of the new loan cannot exceed the interest rate of the loan being refinanced. However, the interest rate of the new loan does not have to meet the interest rate requirements established in RD Instruction 1980-D, §1980.320 Interest rate.
  • Property must be owned and occupied by the borrowers as their principal residence.
  • The guarantee fee is 1.00% of the…

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