First-Time Homebuyer Programs in Oklahoma

For first-timers, homeownership can be a significant challenge, but there are financial aids accessible to make this process easier. If you want to buy a house in Oklahoma, you might want to use a first-time homebuyer program.

To assist you in selecting the best program for your unique needs and goals, MoneyGeek's guide analyzes the various first-time homebuyer programs in Oklahoma.

Consider the costs you must budget for before you even buy a home in Oklahoma. A mortgage down payment is a crucial part of the home-buying process, especially since it might change your monthly costs. For instance, making a larger down payment upfront can lower your monthly payments because you will pay less interest.

Several loan programs — such as down payment assistance, government-backed loans and Oklahoma-specific first-time homebuyer programs — are available to assist you in purchasing a home.

All U.S. citizens and permanent residents are eligible to participate in some nationwide homebuyer programs. However, for government-backed loans like VA loans, not everyone will be eligible because they are only accessible to active-duty military personnel, veterans and their spouses. Oklahoma’s first-time homebuyer programs, meanwhile, are exclusive to residents in the state.

Due to the wide range of options, the perfect homebuyer program for you will rely on your needs and financial capabilities.

First-time homebuyers can buy a property with a 0% down payment through two loan programs. USDA and VA loans are the only two government-backed loans that require no down payments.

For eligible homebuyers in a rural area, a USDA home loan is a mortgage program that can be used to finance the purchase of a property in full.

A USDA home loan does not need a down payment, in contrast to most other home loans. The borrower generally has to possess the following attributes:

• 640 minimum credit score required for faster processing
• Debt-to-income ratio (DTI) of no more than 41%
• At least two years of employment history
• Willingness to adhere to specific criteria and underwriting guidelines

For borrowers with limited incomes, this mortgage with no down payment features competitive rates and benefits, including waived mortgage insurance. However, the home must be 2,000 square feet or less and located in an eligible rural area with a population of less than 35,000.

MoneyGeek’s USDA home loan guide delves into how it works, the requirements, the application process and expert insights that can help you determine whether it is the right program for you.

A VA home loan is a very beneficial loan type to qualified borrowers, making refinancing or buying a property more accessible because of its less stringent requirements. However, it is exclusive to veterans, active military service members and eligible surviving spouses.

A great benefit of VA home loans is that they allow borrowers to put nothing down. There are several benefits to choosing a VA home loan, from the flexible credit requirements to the generally cheaper interest rates:

• No down payment
• No private mortgage insurance
• No minimum credit score
• Sellers can pay closing costs
• Loans are assumable
• Rates are generally lower than conventional loans

The VA backs a portion of the loan, shielding lenders from loss, which makes VA home loan rates competitive.

MoneyGeek’s VA home loan guide outlines its pros and cons, eligibility requirements and current rates, which can help you understand how it works.

A low-down-payment loan program that lets you buy properties with less than a 20% down payment is another choice accessible to homebuyers in Oklahoma.

The two different types of low-down-payment loan programs are conventional (Fannie Mae and Freddie Mac) and FHA loans.

Referred to as conventional loans, Fannie and Freddie loans are non-government-backed mortgages ideal for first-time buyers.

Despite the typical 20% down payment requirement for mortgages, certain lenders may let you apply for a mortgage with as little as 3%. More people can begin the process of becoming homeowners because of the cheaper rate. However, keep in mind that a down payment of less than 20% will necessitate private mortgage insurance (PMI).

While it's advised that you compare lenders to find the right conventional mortgage lender for your unique requirements and circumstances, MoneyGeek has selected these three top lenders:

• Quicken Loans via Rocket Mortgage
• Bank of America
• Caliber Home Loans

MoneyGeek’s conventional home loan guide features its advantages and disadvantages, expert insights, types of conventional loans and frequently asked questions to assist you in the process of buying a home.

An FHA loan is a mortgage originated by private lenders that the Federal Housing Administration (FHA) insures.

FHA loans are a popular choice for first-time homebuyers since they have less stringent standards than conventional loans. Depending on your area, FHA loans typically have lenient criteria:

• Minimum credit score of 500
• Maximum debt-to-income ratio of 56.9%
• Minimum down payment of 3.5%

The FHA doesn't offer mortgage loans to homebuyers; rather, it covers loans provided by independent, FHA-approved lenders. Using both their policies and FHA guidelines, the lenders evaluate the loans. If accepted, the lender funds the loans while the FHA provides insurance.

MoneyGeek’s FHA home loan guide details the different types of FHA loans, benefits and drawbacks, loan qualifications and more, so you can thoroughly understand how it works.

An FHA 203(k) loan is a federally backed mortgage that integrates two loan types to pay for both the purchase and rehabilitation of a home. A conventional mortgage and a construction loan are combined in this sort of loan.

FHA 203(k) loans are available in two forms: standard and streamlined. For buyers who must considerably repair and upgrade their properties, the standard 203(k) is the best option. However, this loan requires approval from a consultant with the HUD. On the other hand, homebuyers who require straightforward renovations should consider a streamlined 203(k), also known as a simplified 203(k) loan.

Market factors determine how much an FHA 203(k) loan will cost. Compared with a standard FHA loan, the interest rate of the FHA 203(k) loan is typically between 0.75% and 1% higher.

MoneyGeek’s FHA 203(k) loan guide gives you a comprehensive overview of this loan and how it works.

In addition to the federal loan programs that are available, you can benefit from Oklahoma's first-time homebuyer programs.

The Oklahoma Housing Finance Agency (OHFA) offers 3.5% towards your total loan amount in down payment and closing cost assistance, which is given as a gift and does not need to be repaid. The OHFA also provides 30-year fixed-rate mortgages.

You might qualify for a special interest rate if you are a teacher, law enforcement officer, firefighter or state employee in Oklahoma.

• 4Teachers – Borrowers must be employed by an Oklahoma-accredited school and hold a valid teaching certificate issued by the Oklahoma State Department of Education.
• Shield – Police officers, firefighters, paramedics and emergency medical care employees can get mortgages with lower interest rates through the Shield program.
• State Employee – Employees of the state government in Oklahoma may also be eligible for an OHFA low-interest mortgage.

If you’re buying a home within OKC’s program boundaries, the city provides up to $15,000 in down payment assistance. While you must attend a free homebuyer education course to qualify, the program does not always require users to be first-time homebuyers.

It can be challenging to make your first home purchase in Oklahoma. For first-time homebuyers, MoneyGeek has provided answers to a few frequently asked questions to help you get started.