USDA will allow for a refinance of your USDA Loan to a non-USDA Loan at anytime in the future, without any penalty for doing so.
However, there are circumstances in which a USDA to USDA Refinance may be beneficial. By refinancing's an existing USDA Loan, homeowners will be able to take advantage of the following USDA Refinance benefits:
- USDA Refinance available even if the house is worth less than the current mortgage
- No appraisal report requirement when completing a USDA Refinance of an existing USDA Guaranteed Loan
- No cash-to-close option for qualified USDA Refinance loan borrowers
- Can still obtain a USDA Refinance even if the house is no longer in a designated USDA Loan eligible area
USDA Refinance Loans allows homeowners with a USDA Guaranteed or USDA Direct Loan to refinance to obtain a lower interest provided the following guidelines are met:
- Household income cannot exceed current USDA Loan eligibility requirements
- On-time mortgage payment history within the last 12 months
- USDA Refinance loan, excluding the financed upfront USDA Guaranteed Fee, can't exceed the original loan amount
