USDA does allow for the refinance of current USDA Guaranteed or USDA Direct Mortgages.

The USDA Refinance is designed to lower the interest rate on a current USDA mortgage and is only available in a fixed rate. A USDA Refinance Loan can be performed quickly and easily. USDA Refinance Loans require no property inspection.

If you do not currently have a USDA Mortgage on your home, you are not eligible for a USDA Refinance and you may want to consider an FHA Refinance, Conventional Refinance or VA Refinance.

What are the basic requirements for an USDA Refinance?

  •  The mortgage to be refinanced must already be a USDA Loan (Guaranteed or Direct).
  •  The mortgage to be refinanced should be current (not delinquent).
  •  The refinance is to result in a lowering of the borrower's monthly principal and interest payments.
  •   No cash may be taken out on mortgages refinanced using the USDA loan refinance process.

How much can I refinance?

The maximum amount for a USDA Refinance is determined by:

Maximum Loan Amount
The is no set maximum loan amount allowed for an USDA Loan. Instead, your debt-to-income ratios will dictate how much home your can afford (29/41 ratios). Additionally, your total household monthly income must be within USDA allowed maximum income limits for your area. Maximum USDA Guaranteed Loan income limits for your area can be found at here.

Maximum financing
The maximum USDA Rural Loan amount will be 101% of the appraised value of the home (100% plus the 1% USDA loan guarantee fee).