The United States Department of Agriculture (USDA) offers various loan programs to help people in rural areas purchase, build, repair or improve homes One option is USDA land loans, which provide financing to buy and develop sites for housing If you’re looking into USDA loans in Oklahoma, this guide covers key information on eligibility, types of loans, terms, and how to apply.
An Overview of USDA Land Loans
The USDA provides two main types of land loans through its Section 523 and Section 524 programs:
-
Section 523 loans help non-profit organizations acquire and develop sites solely to be used for self-help housing construction. Self-help housing is when participants provide some of the labor themselves.
-
Section 524 loans assist non-profits in purchasing and developing land to create sites for low- and moderate-income families. The sites can be sold to eligible buyers using USDA single family housing loans or other mortgage financing.
In both cases the non-profit organization takes out the loan and then uses the funds to prepare building sites. Qualified borrowers can then buy the sites to construct new homes. Land loans make it possible for more people to achieve homeownership in rural Oklahoma.
Who is Eligible for USDA Land Loans?
To qualify for Section 523 and 524 land loans, the applicant must be a non-profit organization with legal authority to operate a revolving loan fund. Examples include:
- Private non-profit organizations
- Public non-profit organizations
- Tribal governments
- Community development corporations
- Faith-based non-profits
The non-profit must demonstrate financial strength, management skills, and capacity to comply with relevant laws and regulations.
For Section 524 loans, the sites purchased can only be sold to low- or moderate-income buyers. Low-income is defined as 50-80% of area median income. Moderate income is up to 115% of area median income.
Key Terms and Details of USDA Land Loans
Some key terms and details to understand about USDA land loans include:
-
Loan amounts depend on the number of sites to be developed and total project costs.
-
The loans have a 5-year term and fixed interest rate. Rates are set monthly.
-
Section 523 loans for self-help housing sites have a 3% interest rate.
-
Section 524 loans for general sites are below market rate.
-
Loan funds can cover purchase price, fees, grading, installation of utilities and water/waste systems, and other approved development costs.
-
The loans must meet USDA site development standards for issues like minimum lot size, setbacks, community water supply, and more.
How to Apply for a USDA Land Loan in Oklahoma
If you represent a non-profit interested in a USDA land loan, follow these steps:
-
Contact the USDA Rural Development State Office in Oklahoma to discuss the project.
-
Work with USDA staff to choose the right loan program and confirm eligibility.
-
Submit the site loan application with all required documentation. Work closely with USDA at each stage.
-
If approved, use the loan funds to purchase and develop sites per program rules and development standards.
-
For Section 524, market and sell sites to verified low/moderate income buyers.
Consult with USDA early in the process for guidance on putting together a competitive, compliant application. They can explain requirements and help set your project up for success.
Tips for Securing USDA Land Loan Approval
Though USDA land loans offer below market rates and favorable terms, you still must meet standards and requirements to get approved. Here are some helpful tips:
-
Highlight experience – Document your non-profit’s successful track record developing housing or managing construction projects. This proves capacity.
-
Show site viability – Conduct soils tests and other assessments to verify the site is suitable and development costs are accurate.
-
Have permits ready – Secure any required permits, zoning variances, and approvals ahead of time to avoid delays.
-
Prove demand – Provide evidence of demand for housing in the area to show the sites can sell quickly. Get pre-sales if possible.
-
Watch costs – Controlling development costs can improve loan feasibility. Have third-party estimates to justify the budget.
With the right preparation and planning, your non-profit can get approved for a USDA land loan in Oklahoma. This special financing can help bring more affordable housing and homeownership to rural communities.
Other USDA Home Loans in Oklahoma
In addition to land loans, the USDA Rural Development office offers other home financing options in Oklahoma, including:
-
Single family housing direct loans – Direct 1% interest loans for low-income buyers unable to qualify for traditional mortgages.
-
Single family housing guaranteed loans – The USDA guarantees loans from private lenders to help moderate income buyers with more flexible credit requirements.
-
Single family housing repair loans and grants – Provides subsidized loans and grants to very-low income homeowners to repair, improve, or modernize homes.
Check your eligibility and learn about all the USDA home loan programs available in Oklahoma to find the right option for your needs. Their affordable financing can help make your dream of owning a home a reality.
0 results found for
With loans available to home buyers in rural areas and financing assistance to those who qualify, a USDA loan can help you make the dream of homeownership a reality. Learn more about USDA Loans from Bank of Oklahoma and apply today.
What is a USDA loan?
USDA loans are mortgages back by the U.S. Department of Agriculture as part of the USDA Rural Development Guaranteed Housing Loan Program. USDA loans are available for low- and moderate-income households in eligible rural areas and offer 100% financing, eliminating the need for a down payment.
- Minimal out of pocket costs The USDA Rural Development loan program provides low- and moderate-income households the opportunity to own a primary residence in eligible rural areas. It provides options for no down payment and low monthly mortgage insurance which saves you thousands.
- Advantages of a USDA loan
- No down payment
- Minimum 620 credit score
- Low monthly mortgage insurance
- Low closing costs
- No minimum contributions from buyer
- No first time home buyer requirement
- Gift funds allowed, including closing costs
- Seller contributions allowed
- Experienced customer service Our mortgage bankers offer personalized service and are available to walk you through the home-buying process. Find a local mortgage banker using the link below or give us a call. If you have existing mortgage-related questions, call mortgage customer service at 800-947-7061. Find a Mortgage Banker
- Loan comparison calculator In addition to the calculated monthly payments, annual percentage rate (APR) offers a good apples-to-apples comparison between loans. APR takes into account the varying discount points, closing costs and fees that are typically added into the loan amount and financed over the term of the loan. If the fees are paid “out-of-pocket” then the APR will be the same as the stated interest rate. Use this loan comparison calculator to help determine the best loan option for you. Calculator
Apply with our online application. It walks you through the process and allows you to submit documents securely using your phone, tablet or computer. You also get 24/7 access to your loan in progress and a direct line of communication with your loan officer to make sure your loan stays on track for closing!
After your application is completed, your mortgage banker will contact you to answer any questions you may have and request items if they need additional documentation.
Once everything is finalized, well send you the application package. This package will contain papers for you to sign and a list of items well need to verify the information you provided about your finances during the online application.
After we have your deposit, well order an appraisal from a licensed appraiser who is familiar with home values in your area.
Youll also need to obtain title insurance. If you are purchasing a new home, well work with the real estate broker or seller to ensure the title work is ordered as soon as possible. If you are refinancing, well take care of ordering the title work for you.
After we receive all your paperwork — your application package, the appraisal and the title work — well contact you to schedule your loan closing. If you are purchasing a home, well also schedule the closing with the real estate broker and the seller.
The closing will take place at the office of a title company or attorney in your area who will act as our agent. A few days before closing your Mortgage Banker will contact you to walk through the final information.
Buying a House Using USDA Rural Development Loan ($1,000 DOWN)
FAQ
What is the income limit for a USDA loan in Oklahoma?
How much is the down payment for land in Oklahoma?
Does Bank of America do USDA loans?