Refinancing program expanded
Alaska is being included in a in a pilot program that enables current USDA-RD borrowers to save money on housing costs by refinancing their mortgages with lower interest rates, announced USDA-Rural Development Alaska State Director Jim Nordlund recently.
“Our expansion of this program will help more rural borrowers refinance their mortgages to reduce their monthly payments and ease their financial burdens,” said Nordlund. “As our economy continues to recover, this program will enable rural families living in USDA-RD financed homes to take advantage of historically low interest rates.”
USDA-RD unveiled the initiative almost a year ago. It initially included borrowers in 19 states hardest hit by the downturn in the housing market.
The pilot expands upon ongoing effort to assist rural homeowners holding loans made or guaranteed by USDA-Rural Development. In 2010, USDA-RD established an aggressive modification policy for guaranteed loans that helps homeowners who are delinquent on their mortgages. These homeowners can lower their monthly payments through a loan modification that re-amortizes their payments over a term of up to 40 years, lowers their interest rate, or both. Rural Development also has a Mortgage Recovery Advance program in which the agency provides guaranteed lenders up to 12 months of mortgage payments on behalf of borrowers who have fallen behind on their payments due to job loss or other hardships.
Participants in the pilot refinancing program are required to meet income eligibility requirements, and must have made their mortgage payments on time for 12 consecutive months. Borrowers participating in USDA-RDs Single Family Housing Direct and Guaranteed loan programs are eligible to participate. Borrowers do not have to obtain new credit reports, property inspections or home appraisals. Refinanced loans must be at least 1 percent below the original interest rate. Terms cannot exceed 30 years. No cash out is permitted to the borrower.
The Alaska State Office of USDA is at 800 W Evergreen Ave ., Suite 201, Palmer, AK 99645-6539, 907-761-7705, www.rurdev.usda.gov/AKHome.html.