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Requirements for all refinance loans
 Current loan must be a 502 direct or guaranteed
loan
 30 year loan term
 Fixed interest rate at or below the current interest
rate and must not exceed the maximum limit set
forth in 3555.104(a)
 Late fees are not eligible to be included in the new
loan amount  
 Subsidy recapture may be paid or subordinated to
the new first lien (direct loans only)   
 Cash out from collateral equity is not an eligible
loan purpose.   
 The loan must have closed 12 months prior to
loan application for the refinance  
 Property must be owner occupied  
 Household must meet applicable adjusted annual
household limit
 Properties located in ineligible rural areas remain
eligible for refinance
 USDA Leveraged Loans are ineligible
 Remaining funds at loan closing that may occur
due to final real estate tax and/or insurance
calculations may be returned to the borrower at
loan closing.    
Requirement   Non‐streamlined Streamlined Streamlined‐assist
Appraisal   Yes  Only for direct loans that
received subsidy to
calculate recapture
 Only for direct loans that
received subsidy to
calculate recapture
Maximum Loan
Amount, eligible loan
costs listed   
Cannot exceed new
appraised value.  
 Principal & Interest  
 Closing costs
 Funds to establish tax
and insurance escrow
 Upfront guarantee fee  
 Subsidy recapture due
Cannot exceed original loan
amount.  
 Principal & Interest
 Re‐conveyance fee
 Upfront guarantee fee
New loan amount may
include:  
 Principal & Interest
 Closing costs  
 Funds to establish tax
and insurance escrow
 Upfront guarantee fee  
Add/Remove
Borrowers (one
original borrower must
remain)  
Yes Yes  Add borrowers only
 Only deceased
borrowers may be
removed  
Credit    Loan paid as agreed 180
days prior to loan
application  
 Requirements of
Chapter 10
 Loan paid as agreed 180
days prior to loan
application
 Requirements of
Chapter 10
 Loan paid as agreed 12
months prior to loan
application
2
Requirement   Non‐streamlined Streamlined Streamlined‐assist
Ratios  GUS Accept, no debt
ratio waiver required  
 GUS Refer, debt ratio
waiver to meet HB
Chapter 11  
 GUS Accept, no debt
ratio waiver required  
 GUS Refer, debt ratio
waiver to meet HB
Chapter 11
 No ratio calculation
required  
Can GUS be utilized?   Yes Yes No
Include subsidy
recapture?   
 Yes, if appraised value
supports
No No
Net tangible benefit
required?  
No No Yes
 $50 or greater reduction
in new PITI (including
annual fee) as compared
to current PITI payment
Subordinate “silent”
seconds or subsidy
recapture due?
Yes Yes Yes
Resources
The following resources are available:  
7 CFR Part 3555Image AddedImage Added

Additional Information:  https://wwwcontent.rdgovdelivery.usda.govcom/files/3555‐1appendix01.pdf   
HB‐1‐3555:  https://www.rd.usda.gov/publications/regulations‐guidelines/handbooks#hb13555
USDA LINC Training and Resource Library:                                                                                                              
https://www.rd.usda.gov/programs‐services/lenders/usda‐linc‐training‐resource‐library      
Property and Income Eligibility:   http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do    
List of USDA State Office e‐mail boxes to deliver manually underwritten loan files or manual loan closing submissions:  
https://usdalinc.sc.egov.usda.gov/docs/rd/sfh/lenderloanclosing/lender/Electronic_Doc_Delivery_Non_GUS_loans.pdf  
Questions regarding direct loan subsidy recapture may contact the USDA Customer Service Center (CSC):  1‐800‐414‐
1226 attachments/topic_files/USDARD/USDARD_427/2018/05/29/file_attachments/1014747/Section%2B502%2BDirect%2Band%2BGuaranteed%2BLoan%2BRefinance%2BComparison%2Band%2BComplete%2BAp__1014747.pdf