Among new Obama Administration moves to aid housing is a pilot program aimed at helping certain rural borrowers refinance to reduce their payments.
Agriculture Secretary Tom Vilsack said in a statement that officials would be working with lenders on the pilot program, allowing select rural homeowners take advantage of what have been historically low interest rates.
The Single Family Guaranteed Rural Refinance Pilot Program will operate in 19 states that are among the hardest hit by the recent housing downturn and be available to qualifying homeowners who have loans made or guaranteed by USDA Rural Development.
The states are 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 U.S. Department of Agriculture estimates 235,000 homeowners will be eligible to refinance their loans under the two-year pilot program without obtaining new credit reports, property inspections or home appraisals.
To be eligible, borrowers must live in one of the aforementioned states and have made their payments on time for 12 consecutive months. The loans they refinance into must lower their payments and have terms no longer than 30 years. No cash-out refinancing will be allowed.
The program will be reviewed after two years to see whether it should be ended, continued or made permanent.
