Financial Concepts Mortgage is here to assist new and existing homeowners in Oklahoma City and rural Oklahoma with USDA home loans. Rural Housing Service (RHS) loans are more commonly known as USDA loans. These mortgages are backed by USDA Rural Development and are issued by private mortgage lenders like our expert team via the Single-Family Housing Guaranteed Loan Program.
The USDA loan program was created to improve the economy and the quality of life in rural America. The USDA offers a 90% loan guarantee on RHS loans. Since that high percentage reduces risk, Financial Concepts Mortgage provides 100% loan financing with no down payments and low interest rates for qualified rural homebuyers. We’re happy to help homeowners in rural Oklahoma purchase primary residences that are safe, decent, and sanitary. Learn more about USDA home loans and get in touch with us to speak to one of our loan officers.
Getting a loan from the USDA can be a great way for Oklahoma residents to purchase a home, especially in rural areas. However, there are specific requirements that need to be met to qualify for a USDA home loan in Oklahoma. In this guide, we’ll break down exactly what you need to know to see if you’re eligible and how to apply.
Overview of USDA Home Loans
The USDA offers several types of direct home loans to help low and moderate income individuals living in rural areas purchase a home. These loans are administered by USDA Rural Development offices in each state
Some key facts about USDA home loans:
- Offered at fixed low interest rates, often below market rate
- Require no down payment
- Can be used to build, repair, renovate or relocate a home
- No maximum purchase price but must be under area loan limit
- Offer payment assistance to eligible applicants
In Oklahoma, the most common USDA home loan program is the Section 502 Direct Home Loan. This program assists applicants with obtaining safe and decent housing in eligible rural areas.
USDA Loan Requirements in Oklahoma
While requirements can vary slightly by state, there are several basic eligibility criteria you must meet for a USDA home loan in Oklahoma:
Income Limits
Your household income must be below the income limit set for your area. Income limits in Oklahoma range from $39600 to $81,500 depending on household size and county location. You can check income limits here.
Credit Requirements
USDA loans are available to applicants with credit scores as low as 640 Some factors that may disqualify you are
- Bankruptcy in the past 36 months
- Foreclosure in the past 36 months
- High amount of debt relative to income
Home Location
The home you wish to purchase must be located in a rural area designated as eligible by the USDA. You can verify if a property qualifies by using the USDA’s eligibility site.
Home Condition
Existing homes must be decent, safe, sanitary, and structurally sound. New homes must meet USDA construction standards.
Citizenship
Applicants must be U.S. citizens, U.S. non-citizen nationals, or qualified aliens.
Repayment Ability
You must demonstrate adequate and dependable income to repay the loan. Your total debt-to-income ratio must not exceed 41% and your housing expense-to-income ratio must not exceed 29%.
Use as Primary Residence
You must agree to personally occupy the home as your primary residence and not use it as a vacation home or investment property.
How to Apply for a USDA Home Loan in Oklahoma
To get started, follow this step-by-step process:
-
Determine your eligibility. Use the income limits and eligibility tools above to see if you may qualify.
-
Find a USDA-approved lender. You can start your application with any Oklahoma lender approved to process USDA loans.
-
Complete a loan application. Your lender will assist you with gathering all required documentation and submitting your full application.
-
Home eligibility review. The USDA will review the rural location and condition of the property.
-
Income verification. The USDA will verify your household income, debts, and credit history.
-
Loan approval or denial. If approved, you will receive a Conditional Commitment outlining your loan amount and terms.
The approval process can take anywhere from 2 weeks to a few months depending on the completeness of your application. Working with an experienced USDA lender can help speed up the process.
USDA Loan Terms in Oklahoma
Once approved, here is what you can expect for your USDA home loan terms in Oklahoma:
- Interest Rate: Fixed at the current market rate, around 4.75% as of June 2024
- Downpayment: None required
- Closing Costs: Can be financed into the loan
- Loan Term: 33 years (up to 38 years for very low income borrowers)
- Loan Limits: Vary by county, check limits here
- Maximum Debt Ratios:
- PITI not to exceed 29% of income
- Total debt not to exceed 41% of income
The USDA also offers payment assistance to eligible borrowers to keep monthly payments affordable.
By understanding the USDA home loan requirements and application process in Oklahoma, you can determine if this financing option may be a good fit for your budget and lifestyle. Connect with a USDA-approved lender to start the process today.
Offering USDA Loans in OK, KS, TX, AR, & AL
Financial Concepts Mortgage is licensed to provide USDA loans in Oklahoma City, rural Oklahoma, Texas, Kansas, Arkansas, and Alabama. There is no maximum loan size with the USDA loan program. The amount you’re able to borrow is limited by your household’s debt-to-income ratio. Our experienced team will help you determine the loan size you need and can qualify for.
There are many types of loans available to homebuyers in Oklahoma. USDA loans provide many benefits compared to conventional loans or FHA loans. Our loan experts are here to help you choose which loan best fits your needs and situation. Check out some of the benefits of USDA loans:
- Low interest rates
- No required down payment
- Flexible credit score requirements
- No prepayment penalties
- No homeowner counseling required
- Can be used by first-time homebuyers and previous homeowners
- Closing costs and mortgage insurance premiums may be financed into your loan
- Lower mortgage insurance rates than conventional or FHA loans
- Choose a 15-year or 30-year fixed-rate mortgage
In order to qualify for a USDA loan, you must meet specific requirements. Homebuyers must meet the USDA’s “ability to pay” standards, which include holding a steady job and income proven by tax returns, having a credit score of at least 640, although this can vary by lender, and having a debt-to-income ratio of 41% or less. Other requirements include:
- Family income cannot exceed the limits set for your area
- You cannot make more than 15% above the local median salary
- Property must be located within eligible rural areas
- Loans can be used for single-family homes only (no duplexes)
- Mortgage insurance is required for USDA loan applications
Rural Development Loan Refinancing
If you live in rural Oklahoma, you may qualify to refinance your rural development loan with an unlimited LTV refinance. An appraisal is not always required for this loan, and the process can be quick with guidelines that are easy to qualify for. Contact us to learn more about the USDA Streamlined-Assist Refinance program.
5 Things You Need to Know About USDA loans
FAQ
What is the income limit for USDA loans in Oklahoma?
Is FHA better than USDA?
What disqualifies a home from the USDA financing quiz?
How high does your credit score need to be for a USDA loan?