Last week, USDA Rural Development in Michigan got an early start on Homeownership Month by promoting a pilot refinancing program, announced in February by Secretary Tom Vilsack, to help residents with current USDA home loans reduce their payments.
Deputy Under Secretary for Rural Development Doug O’Brien and USDA Rural Development State Director for Michigan James Turner made the announcement at the Portage office of AmeriFirst Home Mortgage, a leading partner with USDA’s Guaranteed Home Loan program.
AmeriFirst agreed to participate in the pilot refinance initiative and eight of the first 26 loans were with their customers.
“Since the creation of the USDA Guaranteed Home Loan program, USDA has helped more than 54,000 rural Michigan residents purchase houses,” O’Brien said. “This pilot refinancing initiative helps people keep their homes and avoid financial hardship. I encourage any USDA homeowner who is eligible to explore this simplified refinancing program.”
Existing Rural Development borrowers eligible for the pilot refinance program are not required to obtain new appraisals, property inspections or credit reports. The new interest rate for the refinance must be a fixed rate at least 1 percentage point below the current interest rate. The term cannot exceed 30 years. No cash-out is permitted to the borrower. Complete details concerning eligibility are available at any USDA Rural Development office.
Homeowners who meet these criteria may refinance their Rural Development guaranteed loans regardless of the loan-to-value ratio for the property. This enables borrowers who owe more on their mortgages than their homes are worth to get lower interest rates and reduce their monthly mortgage payments.
“The pilot program can help stabilize neighborhoods and prevent the disruption and loss caused by home foreclosures,” Turner said. “The goal is to help residents keep their homes and meet their obligations by giving them some financial breathing room.”
After the Portage event, Deputy Under Secretary O’Brien went to Edwardsburg, on the Indiana state line, where he toured a glycerine-refining facility owned by CRB Real Estate LLC. The company received two Business and Industry Guaranteed Loans for the purchase of real estate and the building and funding to finance the purchase of machinery and equipment. Funding was through the American Recovery and Reinvestment Act.
June is Homeownership Month. Read more by clicking here.
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I am a loan officer, and we would love to help our borrowers lower their rates, but we cannot find a lender to allow the interest on the payoff or the tax and insurance escrow account that needs to be set up be financed into the loan. There is no way to lower their rate 1 percent and pay all of their closing costs and prepaids for them as well as closing costs as a credit from us!! The amount of money for that is too high..and no one has the cash at home to bring this to the closing table.