A Guide For First-Time Home Buyers In Oklahoma

If you're thinking about buying your first home in The Sooner State, chances are you'll be able to find something affordable. The Oklahoma median home price is under the national average, so finding your first home without breaking the bank is likely within your reach. In addition, there are currently several assistance programs that can make becoming an Oklahoman easier than ever.

Being a first-time home buyer in Oklahoma (or anywhere, for that matter) means educating yourself about all the available loan types and assistance programs at your disposal. Here, we will cover many of the resources you should consider including loans, down payment assistance programs and more.

Buying A Home In Oklahoma

First, why Oklahoma? Some of the best places to live in Oklahoma have a lot to offer to first-time home buyers as well as home searchers of all types. Like any location, it all depends on your specific tastes and needs.

Are you into big time college football? Do you love country music? Do you imagine yourself walking in a quaint downtown with that laid-back, small-town feel surrounding it? If the answer to any or all of these questions is yes, Oklahoma might be just the place to buy your first home.  

These might be images that already popped into your mind before reading this article, but Oklahoma might surprise you as well. It’s the state with the most man-made lakes, for example. If you think moving to Oklahoma means giving up your love of spending time on the water, think again.

Forests, prairies, lakes and cities both big (Tulsa) and small (Ada) make Oklahoma a fit for more types of first-time home buyers than you might think.

Do I Qualify As A First-Time Home Buyer In Oklahoma?

Qualifying as a first-time homebuyer depends on a few different factors that don't apply to every home hunter. The good news is Oklahoma has programs that can assist both first-time home buyers and those who don’t qualify as first-time home buyers. For example, veterans or those in active-duty service may qualify regardless of previous homeownership.

As you review the programs below, keep in mind the following qualifications that must be met to be considered a first-time home buyer in Oklahoma, as defined by the Oklahoma Housing Finance Agency (OHFA):

• You must be an Oklahoma resident or plan for the home to be your primary residence.
• You have not owned a home anytime in the past 3 years.

First-Time Home Buyer Programs Through The Oklahoma Housing Finance Agency

OHFA provides several programs for first-time home buyers and others seeking residence in Oklahoma. The agency’s mission is “providing housing resources with an eagerness to serve” and they accomplish this by providing various forms of housing assistance to people and families in Oklahoma with low or moderate income.

OHFA works with all 77 counties in Oklahoma, collaborating with local governments as well as local nonprofits to help those in need of housing assistance. This assistance includes helping to pay rent for renters struggling to make ends meet as well as a number of programs geared toward people in Oklahoma looking to purchase a home.

Let’s dive into some of the loan programs, special interest rate programs and down payment assistance programs that you might want to consider if you decide to buy a home in Oklahoma.

OHFA GOLD Loan Program

The OHFA GOLD Loan program for first-time home buyers helps qualified people buy a home in Oklahoma by providing a tax-exempt mortgage revenue bond. This means the money isn't taxed by federal and, sometimes, state and local income taxing authorities.

These loans are available only to first-time home buyers, unless they’re searching in a specific targeted area. If you’re looking in a targeted area that OHFA has identified as having low homeownership rates or slow economic growth then you don’t need to be a first-time home buyer.

The maximum loan amount for non-targeted areas is $349,525 and the maximum loan amount for targeted areas is $427,198. In addition, if you’re a state employee, EMT, teacher, firefighter or law enforcement officer you may qualify for a special reduced interest rate.

The OHFA GOLD program can be used with the following types of loan programs:

• Conventional loans: Oklahoma home buyers using OHFA’s GOLD program can choose conventional loans, which are the most common type of loans used in America and often require a credit score of 620 and down payment minimum of 3%.
• FHA loans: Oklahoma home buyers using OHFA’s GOLD program can also choose FHA loans, which are backed by the Federal Housing Administration and usually require a credit score of 580 and a down payment of 3.5%.
• USDA loans: USDA loans are another option available through OHFA’s GOLD program. Backed by the U.S. Department of Agriculture, these loans are only available in qualifying rural areas, have no down payment minimum and usually require a 620 credit score.
• VA loans: OHFA’s GOLD program offers VA loans backed by the Department of Veterans Affairs to active military, veterans and surviving spouses. These loans have no minimum down payment requirements. The VA doesn’t require a credit score, but lenders will set their own minimum score requirements.

OHFA DREAM Loan Program

The OHFA DREAM Loan program is available to both first-time home buyers and other buyers searching for houses in Oklahoma. Unlike the OHFA GOLD Loan program, the DREAM Loan can be used by buyers even if they own another house. However, they must use the home that they buy with the OHFA loan as their primary residence. Here is a list of the factors assessed for participation in the DREAM Loan:

• Credit score
• Income range
• Purchase price
• Debt-to-income ratio

Other OHFA Programs Available To Home Buyers In Oklahoma

In addition to the aforementioned programs, there are also several low-interest-rate loan programs that Oklahoma buyers in certain categories may be able to take advantage of. These include OHFA 4Teachers, OHFA Shield, and the State Employees Program.

For these programs, you must be buying a home in Oklahoma and use it as your primary residence within 60 days of the sale. You must also have a credit score of at least 640 and be a legal resident of the U.S. The income minimums are set depending on the size of your family and the area you’re looking in.

In addition to these requirements, certain groups of people can get a reduced interest rate based on their current employment.

• OHFA 4Teachers: Special interest rate available for certified teachers who are currently employed by an Oklahoma accredited public or private school.
• OHFA Shield: Firefighters, law enforcement and emergency medical services (EMS) employees can take advantage of this special interest rate.
• State Employee Program: People applying for a home loan who are employed by a state agency in Oklahoma can get a special interest rate as part of the OHFA State Employees program.

OHFA Down Payment Assistance

OHFA down payment assistance programs are done through a variety of lenders in Oklahoma that have been approved by OHFA to provide loans to borrowers using the programs. Home buyers don’t need to be purchasing their first home and they can own another property in addition to the primary residence they’re purchasing with an OHFA down payment assistance program. Borrowers can also use a cosigner for a loan. A co-signer is someone who agrees to be held legally responsible for paying back a loan if the primary borrower doesn't.

For an OHFA down payment assistance borrower, the co-signer will never occupy the property or be on the title. In addition, their income will not be added to the families when calculating the maximum income threshold for program approval.

Here’s some more detail on OHFA down payment assistance programs so you can determine if they might be right for you.

• Down payment reimbursement: OHFA offers up to 3.5% down payment and closing cost assistance on qualifying houses. For example, if you purchase a house that costs $250,000 OHFA can give you up to $8,750 for a down payment if you qualify for the program.
• Reimbursable fees: Some costs associated with purchasing a house, like appraisal fees, may be reimbursable through OHFA.
• Mortgage credit certificates: Mortgage credit certificates help home buyers by providing a tax credit for part of the mortgage interest they pay each year. OHFA provides this to home buyers looking to purchase a home in Oklahoma.

The Bottom Line

Depending on your personal taste and future vision for your life, Oklahoma might just be the right place to buy your first home. Beautiful landscapes, bountiful employment opportunities and plenty of diverse recreational activities are just a few of the things that make this state a great place to call home.

Once you’ve decided to move, be sure to find out all the ways you can save money as you search for that perfect abode. Resources like OHFA first-time buyer loans and down payment assistance programs are a great place to start.

Depending on your income, profession and the area you might be looking, programs like these might be the difference that makes your dream of living in Oklahoma a reality. Ready to get started? Begin the mortgage approval process with our friends at Rocket Mortgage^Ⓡ today!