USDA Streamline Refinance Options: What to Know in 2025

Rural homeowners with USDA loans have a refinancing tool at their fingertips that can help them replace their existing loan with a new one with more favorable terms. USDA streamlined refinance options come in two flavors: Streamlined Refinance and Streamlined-Assist.

What Is a USDA Streamlined Refinance?

The USDA’s streamlined refinance programs make refinancing your current USDA loan simpler. From 2021 to 2023, more than 22,000 borrowers refinanced their USDA loans, accounting for nearly 5.7% of all USDA loans, according to Home Mortgage Disclosure Act (HMDA) data.

With these government-insured mortgage programs, you can:

• Lower your interest rate

• Add or remove borrowers from the loan

• Switch from an adjustable to a fixed rate

Some things you can’t do include:

• Change the loan term (all USDA loans are 30-year fixed)

• Take cash out

• Refinance a non-USDA loan

• Change property ownership on the title

USDA Streamlined Refinance Program

The standard streamlined refinance offers USDA borrowers more flexibility but requires a credit check. This option works well for borrowers who:

• Have good credit and want to refinance quickly

• Need to add or remove borrowers

• Want to refinance but won’t save $50 on monthly payments

Unlike conventional refinancing, this program doesn’t typically require an appraisal, saving you $300 to $500 in fees. The program also allows refinancing even if you’ve lost equity because area home values have fallen. In fact, your refinance loan amount can cover the existing principal, eligible closing costs, and the upfront guarantee fee. The new loan amount can exceed the home’s current value since the lender does not receive an appraisal or take home value into consideration.

USDA Streamlined-Assist Refinance Program

With the streamlined assist option, the goal is to reduce your payment, eliminate credit checks, and avoid extensive documentation requirements. Key features include:

• Must show a $50 or more monthly payment savings

• No credit check required

• No maximum debt-to-income (DTI) ratio limit

• No home appraisal

This option may be best if you:

• Have lackluster credit

• Want the simplest refinance process for USDA loans

• Are worried that your home has declined in value

• Can reduce your payment by $50 per month or more

• Want to minimize upfront loan costs

• Need to add new borrowers or remove deceased borrowers

USDA Streamlined Refinance Rates

One of the great things about USDA refinance rates is they are typically lower than conventional refinance rates. Check with a USDA lender for today’s rates.

USDA Streamlined Refinance Eligibility

Here’s a closer look at the borrowing guidelines for each of USDA’s streamlined refinance options.

Standard Streamlined Refinance Requirements:

• Current USDA loan in good standing

• No late payments in the past 12 months

• Credit score of 640+ (varies by lender, though)

• Meet area median USDA income limits

• Property in an eligible rural area

• DTI ratio under 41% (up to 46% in some cases)

• Primary residence only

• Minimum 180-day seasoning requirement before refinancing

Streamlined-Assist Requirements:

• Current USDA loan in good standing

• No late payments in the past 12 months

• Must reduce monthly payments by $50

• Meet area median USDA income limits

• Property in a current or former eligible rural area

• No credit score requirement

• Primary residence only

• Minimum 180-day seasoning requirement before refinancing

Closing Costs and the USDA Guarantee Fee

Closing costs for a USDA streamline refinance are similar to closing costs you paid when you originally took out your home loan. However, closing fees for USDA streamlined refinance loans are capped at 3% of the loan amount, and this fee can often be rolled into the loan. The upfront USDA guarantee fee is 1% of the loan amount, while the annual guarantee fee is 0.35%; these fees are not included in the closing cost cap.

However, USDA streamlined refinancing can save you money on other fees, such as:

• No appraisal fee ($300 to $500 in savings)

• Reduced documentation fees

• Lower title insurance costs

• Potential lender credits for rate-and-term refinances

To determine if refinancing makes sense, calculate your break-even point — or the amount of time it takes for your payment savings to begin recouping your refi costs. For example, if you refinance and get a $100 monthly savings and you pay $3,000 in closing costs, it’ll take you 30 months to break even.

How to Get a USDA Streamlined Refinance

Ready to refinance your USDA loan? Here’s a step-by-step guide to walk you through the process:

1. Assess Your Goals: Before any refinance, figure out what you hope to achieve in the process. Whether it’s lowering your rate, monthly payment or another goal, this can help you determine which type of USDA streamline refinance program is best for your needs.
   

2. Check Current USDA Rates: Browse online to see current USDA refinance rates versus your existing mortgage rate. This will help you calculate potential savings and your break-even point. However, make sure you’re comparing similar loan product rates to make an accurate apples-to-apples price comparison.
   

3. Shop USDA-Approved Lenders: Compare rates and fees from multiple lenders that have USDA refinance experience. Check lenders’ online customer ratings and ask about their refi process and closing timelines.
   

4. Gather Documentation: To start, gather bank statements, a current mortgage statement, proof of homeowners insurance, and a government-issued ID. Most likely, the lender won’t require pay stubs, W2s, or federal tax returns, but it may ask for them depending on your situation.

5. Submit Your Loan Application: Once you’ve chosen a USDA lender, submit your full loan application and any required documentation. It might be a good idea to lock in your interest rate to hedge against a rising-rate environment, too. Your lender will provide you with a loan estimate outlining the terms and conditions of your new loan, including your new payment, interest rate, closing costs, and other key details.
   

6. Close Your Loan: Once your USDA streamline refinance has gone through underwriting, your lender will give you the clear to close on your new loan. You’ll review the closing disclosure at least three business days prior to closing to ensure all the loan details are correct and final loan costs are in line with your expectations. At the closing, you’ll sign final paperwork and seal the deal. You’ll then begin making your new loan payments and reap the savings.

USDA Streamlined Refinances: Your Path to a Better Mortgage, More Savings

USDA streamline refinance programs give rural homeowners a unique opportunity to improve the terms of their mortgage and reap potential long-term savings. With minimal documentation requirements, no appraisal in most cases, and minimal hassle, you’ll have a cost-effective avenue to get a more affordable mortgage.

Whether you choose the standard streamlined refinance for its flexibility or the streamlined-assist option for its simplified process, both programs provide great benefits that make USDA loans an attractive means to achieve your homeownership and financial goals.