USDA Streamline refinance: A complete guide

Do you have an existing U.S. Department of Agriculture (USDA) loan? If so, you might consider a USDA Streamline refinance, which can be a great opportunity for the right homeowner. Homeowners can benefit from reduced interest rates, simplified processes, and other perks with a refinance USDA loan.

But does a USDA Streamline refinance make sense for your exact situation? After all, you want to feel secure about making the right move. Read on to learn about financing options, requirements, rates, and all the USDA Streamline pros and cons so you can opt for this type of loan refinance with confidence.

What is a USDA Streamline refinance?

When you refinance, you generally replace your old loan with a new one that has better terms. For example, you might “trade in” your existing loan for one with a lower interest rate or a shorter term. Refinancing can help you save money – hopefully thousands – over your loan term.

You must originally have a USDA loan to qualify for a USDA loan refinance. You must also live in your home as your primary residence. USDA loans are government-backed home loans channeled through the federal Single Family Housing Guaranteed Loan Program. They are aimed at low- to moderate-income rural or suburban homeowners. Since the federal government backs them, lenders can offer lower interest rates and no down payment options to borrowers.

A USDA Streamline refinance allows those with USDA loans to refinance and replace their existing USDA loans with a new USDA loan. Not only can you take advantage of better terms (which can reduce your monthly payments), but you can “streamline” the process without a new appraisal, an inspection, or extensive documentation. You can also add or remove a borrower to a new mortgage and roll closing costs into this type of loan.

USDA Streamline finance options

When considering a Streamline refinance, you have a choice between two types of Streamline refinance USDA options: the USDA Streamline-assist refinance and the USDA standard Streamline refinance. Let’s walk through each loan type and explore why you might want to consider one over the other.

USDA Streamline-assist refinance

The USDA Streamline-assist refinance is a mortgage refinancing option that aims to help you lower your interest rate and payments. The Streamline-assist refinance requires no appraisal, credit check, or income verification.

A couple of requirements: You’re required to have made at least 12 consecutive mortgage payments on your existing USDA loan. You must also reduce your monthly payment (including principal, interest, real estate taxes, and homeowners insurance) by at least $50 to obtain the loan. 

When might a Streamline-assist refinance be your best option? If you’d like to sidestep a credit check or income verification, a Streamline-assist refinance might make sense, because it’s easier to qualify for than the standard Streamline refinance.

USDA standard Streamline refinance

The requirements for a standard Streamline refinance are generally the same as a Streamline-assist refinance. A USDA standard Streamline refinance allows you to lock in a lower interest rate – the new interest rate must be at or below your current interest rate. This loan may require income verification and a credit check and may be a bit harder to qualify for than a Streamline-assist.

You cannot have received a subsidy for the loan, must have at least a year-old home loan, must have a qualifying debt-to-income (DTI) ratio, and have your mortgage paid as agreed for the last 180 days. (DTI refers to your monthly debt payments divided by your gross monthly income.) You must also meet standard credit guidelines.    

Why might the standard Streamline refinance be the best option? If you have no problem with an income verification and a credit check, a USDA Streamline assist might work in your particular situation.

USDA Streamline refinance requirements

There’s some general USDA refinance requirements and eligibility criteria for both types of USDA Streamline refinances. You must:

• Have an existing USDA loan at least 12 months old.
• Reduce your monthly payment by at least $50.
• Be within the USDA’s single-family housing income limits.
• Be one of the original borrowers.
• Live on the property as your primary residence.
• Not have made any late payments over the past 12 months.
• Choose a new loan term of 30 years or less.
• Obtain a new fixed interest rate at or below the current interest rate.

Check with your lender to learn more about USDA Streamline requirements.

USDA Streamline refinance rates

What are USDA refinance rates? The current interest rate for Single Family Housing Direct mortgages was 5% as of July 1, 2025. The interest rate can be as low as 1% when modified by payment assistance, but rates can vary based on factors like credit score and market conditions. Check with your USDA lender for more information.

Pros and cons of a USDA Streamline refinance

Let’s look into the advantages and disadvantages of USDA Streamline refinances to help you get the full picture and to help you get closer to making a decision about your current USDA loan.

Pros of a USDA Streamline refinance

The benefits of a USDA Streamline refinance include:

• Simplified application process: You don’t have to fill out a lengthy application to qualify for this type of loan, which will generally save you time on the refinancing process.
• No appraisal or inspection required: USDA Streamline refinances don’t require you to pay for an appraisal or inspection, which can help you keep costs down.
• Potential for lower interest rates and monthly payments: You must obtain a new interest rate at or below the current interest rate when you refinance, which means you could save money on your monthly payments and over your loan term.
• Closing costs potentially rolled into the loan: Rolling your closing costs into your loan means you don’t pay your closing costs at the closing table; they go into your loan, so you won’t have to come up with a lump sum at closing.

Cons of a USDA Streamline-assist refinance

It’s worth exploring the potential drawbacks, which can include:

• Only available for existing USDA loans: You can’t get a USDA Streamline unless you already have a USDA loan. For example, if you have a conventional loan, you can’t decide to refinance with a USDA standard or Streamline assist.
• No cash-out option: If you need cash for a project or to pay off medical bills or student loans, you can’t cash out a portion of your home equity using a USDA Streamline.
• Limited lender availability: You may also find it tricky to find a lender. Not all lenders offer USDA loans, but you can tap into the USDA’s list of approved mortgage lenders to help you choose the right one for you.
• Must meet specific eligibility criteria: You must meet the USDA loan criteria listed above, including the length you’ve held the existing mortgage and amount of time you’ve lived on the property, not have late payments, meet income and credit qualifications, and intend to accept a lower interest rate.
• Must pay closing costs and guarantee fees: You’ll have to cover closing costs and guarantee fees to obtain a Streamline refinance. You’re likely no stranger to closing costs and guarantee fees, because you paid them when you obtained your USDA loan. A quick review: Closing costs typically run 2% – 6% of the loan amount, while you’ll pay an annual 0.35% USDA guarantee fee.

FAQ

Still have questions about the USDA Streamline pros and cons? Read our FAQ to learn more.

Can I take cash out with a USDA Streamline refinance?

USDA Streamline refinances do not allow cash-out options. You may want to consider a cash-out refinance instead, which is a mortgage refinance that allows you to access the equity in your home (the portion of the home you own) and gives you cash in exchange for taking on a larger mortgage.

For example, let’s say you need $10,000 in cash for a home renovation project. You bought your home for $300,000 and you’ve paid off $80,000, meaning your balance is $220,000. A cash-out refinance would give you a new mortgage worth $230,000 – the new principal amount plus the cash you need for your renovations. Your lender will give you the $10,000 after closing.

Do I need a new appraisal for a USDA Streamline refinance?

You don’t need a new appraisal for a USDA Streamline refinance.

What exactly is an appraisal?

An appraisal is the process of a real estate professional determining the fair market value of a property. The appraisal helps a lender decide on a fair price for the home and can cost between $600 – $2,000 (though single-family home appraisals cost less than multifamily home appraisals) – that’s money you can keep instead of bringing it to the closing table.

How long does the USDA Streamline refinance process take?

The average timeline for Streamline refinances can be faster than traditional refinances. You can often get a Streamline refinance within 30 days. However, it can depend on your lender’s capacity and how long it takes for you to submit information for a standard Streamline (such as providing income documentation).

Are there closing costs associated with a USDA Streamline refinance?

Yes, you’ll pay closing costs, which typically run 2% – 6% of the loan amount, but you can roll your closing costs into the new loan instead of having to bring money to the closing table. Keep in mind that rolling your closing costs into the new loan amount will add to your overall costs, meaning that you will owe more than if you paid the closing costs yourself.

Can I switch lenders for a USDA Streamline refinance?

You can choose any USDA-approved lender for the refinance, but not every bank and credit union will offer USDA loans. You can cut to the chase by checking out the USDA’s list of approved mortgage lenders. You don’t have to choose the same lender that lent you your original USDA loan – feel free to look into several lenders before you make a final decision.

The bottom line: A USDA Streamline refinance can lower costs

Saving money over the course of your loan can spell enormous relief, and a USDA Streamline can help you save thousands over your loan term. USDA Streamline refinances can be a great option if you have an existing USDA loan and would like to take advantage of a lower rate or better terms. If you’re an eligible homeowner seeking lower payments and a simpler refinancing process, a Streamline might make sense for you.

If you already have a USDA loan, consider contacting a lender to explore all your options and weigh the pros and cons of refinancing your loan. A lender can help you decide whether a USDA Streamline fits your situation or whether you should consider a conventional refinance.

Rocket Mortgage® does not offer USDA loans; however, you can check out the USDA's list of approved mortgage lenders if you are interested in this kind of financing.