A Closer Look at the USDA Rural Loan Pilot Program

A Closer Look at the USDA Rural Loan Pilot Program

November 18, 2013

The USDA Rural Loan Pilot Program was launched on Feb. 1, 2012 to assist current USDA Guarantee Loan borrowers with refinancing their mortgage to obtain a lower interest rate with minimal requirements. A USDA Guaranteed Home Loan can assist most individuals and families in rural areas to become homeowners. The central purpose of the USDA’s Guaranteed Rural Housing Program is to help moderate- and low-income borrowers qualify for a mortgage loan, even if they cannot afford a downpayment. The USDA program is the only program that allows up to 100 percent financing for non-veteran borrowers.
Eligible applicants must:
►Be a current Section 502 Direct or Guaranteed Loan borrower
►Meet the applicable adjusted income eligibility limit
►Reside in an eligible rural area, or an area that was eligible a the time of original loan closing
►Have made timely mortgage payments for the previous 12 months at the time of the loan application
USDA Rural Loan Pilot Program Eligibility Requirements:
►Borrower must have a USDA Guaranteed Loan to qualify
►Borrower must meet income eligibility requirements to ensure that the household income does not exceed allowable amount
►Borrowers cannot be more than 30 days late on any mortgage payments over the last 12 months
►The USDA Rural Loan Pilot Program refinance interest rate must be one percent lower than the current interest rate
States eligible for the Refinance Pilot Program:
Alabama, Alaska, Arkansas, Arizona, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Michigan, Mississippi, Missouri, Montana, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington, West Virginia and Wisconsin
How to apply:
Applicants may apply with an approved lender of their choice that participates in the Rural Refinance Pilot Program.
The USDA Rural Loan Pilot Program will be evaluated after two years to determine whether to continue it, terminate it or make it permanent.

With more than 25 years in the mortgage industry, Rich Obermeier, branch manager for GSF Mortgage Corporation, has worked with some of the largest mortgage companies in the county developing retail and wholesale channels. Rich has assisted in developing and implementing operational protocols for sales managers, originators and loan processors. In recent years, Rich has developed the USDA Rural Development Product in multiple states and locations. Rich may be reached by phone at (262) 957-8901 or e-mail robermeier@gogsf.com.