My husband and I ( living in OHio) are in the process of refinancing a usda rural housing service loan. Our objective is to cash out equity for home improvements and loan cosolidation. The biggest problem has been the subsidy recapture. Originally, when we requested a payoff, the subsidy was requested to be paid off, which left so little equity to work with that it really wasn't worth it. So we originally turned down the offer.
Apparently,if you want to cash out , you have to pay back the subsidy. A straight refinance would allow for the subsidy to be added on as a lien to the property until we no longer reside here.
Not one to give up, I called the usda office and asked if they would make and exception if we used the cash out for home improvements. The rep said that it could be done and to have my lender request a subordination packet and send it back with a bid from the contractor on the home improvements. We did this today. If they approve it, we can defer the subsidy and the loan would be worth our time. My first question is "Has anyone had experience with refinancing a usda loan and had similar challenges?"
The next situation is that my lender called me today and said that we could still close the loan tomorrow and get it going and if we changed our minds during the recision period, we could back out. He said that way if they took the subsidy off, it would close faster and we would get our money next week, which we really need right now. I am wondering how we can sign closing papers and get a different amount of cash out if the subsidy comes off. I am also wondering how hard is it to back out. We definitly will want to if we can't get the subsidy off and get more cash out. This whole situation has been extremely stressful. I have never done this before. We don't want to make a mistake and lose our house. Sorry so long and thanks for any advice! Baker10
Apparently,if you want to cash out , you have to pay back the subsidy. A straight refinance would allow for the subsidy to be added on as a lien to the property until we no longer reside here.
Not one to give up, I called the usda office and asked if they would make and exception if we used the cash out for home improvements. The rep said that it could be done and to have my lender request a subordination packet and send it back with a bid from the contractor on the home improvements. We did this today. If they approve it, we can defer the subsidy and the loan would be worth our time. My first question is "Has anyone had experience with refinancing a usda loan and had similar challenges?"
The next situation is that my lender called me today and said that we could still close the loan tomorrow and get it going and if we changed our minds during the recision period, we could back out. He said that way if they took the subsidy off, it would close faster and we would get our money next week, which we really need right now. I am wondering how we can sign closing papers and get a different amount of cash out if the subsidy comes off. I am also wondering how hard is it to back out. We definitly will want to if we can't get the subsidy off and get more cash out. This whole situation has been extremely stressful. I have never done this before. We don't want to make a mistake and lose our house. Sorry so long and thanks for any advice! Baker10