Agriculture Secretary Tom Vilsack today met with lenders, public officials, and community leaders in central Florida to encourage eligible homeowners to take advantage of historically low home mortgage rates being offered in Florida and 18 other states through a USDA pilot loan refinancing program. Refinancing is available for any homeowner with a loan made or guaranteed by Rural Development, subject to eligibility requirements. Today's announcements are the latest in a series of steps the Obama Administration has taken to strengthen the nation's economy and revitalize rural America because we can't wait for Congress to act.
"Through initiatives like this one, the Obama Administration is taking aggressive steps to fight for homeowners who have played by the rules and are trying to get ahead," Vilsack said. "This refinancing opportunity has the potential to reduce costs for thousands of homeowners. USDA will continue to work with borrowers, community leaders, and lenders in all 19 states participating in this program so everyone who is eligible can take advantage of this opportunity."
Vilsack's visit to Florida is the first in a series of nationwide outreach initiatives the Department is undertaking to provide information on this critically important housing refinance opportunity. In addition to helping homeowners, this initiative will strengthen the nation's housing market. Almost 21,000 Florida homeowners are estimated to be eligible for the USDA program. Across the 19 states covered by the pilot, the number of eligible homeowners is estimated to total 237,000. Vilsack said USDA will be sending Section 502 direct and guaranteed borrowers in each pilot state a letter to make sure they are aware of the opportunity to refinance. The letter will provide instructions for interested borrowers to contact their lender or their State Guaranteed Coordinator to see if they qualify for the Rural Refinance Pilot.
To be eligible for the USDA Single Family Housing Guaranteed Rural Refinance Pilot Program, borrowers must have made their mortgage payments on time for 12 consecutive months. They do not have to obtain new credit reports, property inspections or home appraisals. Refinanced loans must be at least one percentage point below the original interest rate. Terms cannot exceed 30 years and no cash out is permitted to the borrower. Refinancing borrowers would still have to meet low or moderate income limits, and they would have to pay closing costs.
On February 1, 2012, the Obama Administration announced the Rural Refinance Pilot. USDA will review the performance of the pilot after two years to determine whether to continue it, terminate it or make it permanent. The 19 states that are participating in the program are: Alabama, Illinois, Nevada, Oregon, California, Indiana, New Jersey, Rhode Island, Arizona, Kentucky, New Mexico, South Carolina, Florida, Michigan, North Carolina, Tennessee, Georgia, Mississippi and Ohio.
Vilsack also highlighted several other announcements intended to promote construction of rural housing and assist renters seeking safe, affordable housing.
USDA is accepting applications from lenders to help finance the construction, acquisition and rehabilitation of affordable multi-family rental housing for rural residents. Through the Guaranteed Rural Rental Housing Program, USDA Rural Development provides loan guarantees for private lenders and public agencies. Up to $130 million is available for the program for fiscal year 2012. For information on eligibility and how to apply, please see the February 6, 2012, Federal Register.
USDA Rural Development has funding available to help low-income residents secure affordable rental housing. Rural Development will provide vouchers to help low income residents offset the difference between what they can afford to pay for rent and what it costs for safe housing. The vouchers are only available to low-income tenants of Rural Development-financed multifamily properties where the original Rural Development loan has been repaid. Please see the January 24, 2012 Federal Register for more information.
Since taking office, President Obama's Administration has taken historic steps to improve the lives of rural Americans, put people back to work and build thriving economies in rural communities. From proposing the American Jobs Act to establishing the first-ever White House Rural Council -- chaired by Agriculture Secretary Tom Vilsack -- the President wants the federal government to be the best possible partner for rural businesses and entrepreneurs and for people who want to live, work and raise their families in rural communities.
USDA, through its Rural Development mission area, administers and manages housing, business and community infrastructure and facility programs through a national network of state and local offices. Rural Development has an active portfolio of more than $165 billion in affordable loans and loan guarantees. These programs are designed to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural America.