Obama Announces New Pilot Program to Help Rural Borrowers Refi Mortgages into Lower Interest Rates

by The Niche Report magazine07 Feb 2012

USDA, loans, Rural, Housing, Refi, Refinance, lower, rates, rate

WASHINGTON, Feb. 1, 2012 – Agriculture Secretary Tom Vilsack today announced that the U.S. Department of Agriculture is launching a pilot program to help rural borrowers refinance their mortgages to reduce their monthly payments. This initiative is part of the Administration's ongoing efforts to help middle class families, create jobs, and strengthen the economy. The Single Family Housing Guaranteed Rural Refinance Pilot Program will operate in 19 states for homeowners who have loans that were made or guaranteed by USDA Rural Development. These states are among those hardest hit by the downturn in the housing market.

"Through initiatives like the one we are announcing today, the Obama Administration is taking aggressive steps to fight for middle class homeowners who have played by the rules and are trying to get ahead," said Vilsack. "This pilot program will help homeowners' to take advantage of historically low interest rates, and by working closely with lenders, we are helping rural homeowners protect one of the most important investments they will ever make."

USDA Rural Development estimates 235,000 homeowners will be eligible to refinance their loans, which is expected to save them considerable time and money. To be eligible under this pilot, 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 rates below the original interest rate. Terms cannot exceed 30 years. No cash out is permitted to the borrower.

The two-year pilot is open to homeowners in Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oregon, Rhode Island, South Carolina and Tennessee. The performance of the pilot will be reviewed after two years to evaluate whether to continue it, terminate it or make it permanent.

The pilot expands upon USDA's ongoing help for rural homeowners. In 2010, USDA Rural Development 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 reamortizes their payments over a term of up to 40 years, lowers their interest rate, or both. USDA also has a "Mortgage Recovery Advance" program in which the Department 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.

Allowing rural homeowners in good standing that have home loans that were made or guaranteed by USDA to refinance their homes will bring increased capital to rural America and ease the financial burdens on homeowners. This pilot program will not cost taxpayers additional dollars.

All USDA Rural Development housing loans meet rigorous underwriting standards and are made only to qualified borrowers. These are not subprime loans.

Rural Development's housing loans and grants make a significant difference in the lives of thousands of rural Americans across the nation. These investments boost rural economies and create jobs.

The SFHG Rural Refinance Pilot Program complements President Obama's recent announcement to help responsible homeowners and heal the housing market. The measures the President and USDA are taking will help stabilize communities and help middle class families across the country.

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.


  • by zap | 2/8/2012 3:06:31 PM

    Yes and jus when are they going to help those of us who had fannie mae and freddie mac funded mortgages under the USDA RURAL HOME LOANS, that were victims and lost thier homes. why has Mr. Vilsack ingored hte letters after letters from hs own state resident where he was govorner ignored the letters at the time he was govorner regarding the unfair mortgage practices by our federal government that they were not following the proper procuedures in services home mortgages that were in trouble. Yets now they want to help when they think eveyrone has forgotten what the govt did to citizens in 2005-2007 whilist this fanne mae freddie mac was causing mortgage crisis on their own mortgages. Again I will beat a dead horse if that is the only way I can get people to understand it just wasn't fannie mae and freddie mac and the risk taking companies and banks, It was our govt as well that violated home owners rights. Theres help ow, but what about those you ignored and have ignored stating houses we could have sold for 145 for a 115 thosand dollar debts to help each of us as a last resort was refused by our govenmnt from me but they accepted 112000.00 instead. sold my house from under me and six months later sent me a letter stating that I owed property taxes and if i didn't apy them in thirty days they would start foreclosure on me...FOR THE HOUSE THEY ALREADY SOLD?


Should CFPB have more supervision over credit agencies?