Guide to Home Buying Assistance Programs in Oklahoma

As housing prices and mortgage rates rise, the cost of buying a home may feel daunting for many. In fact, with a current average home price over $205,000 in our state, a traditional down payment can vary anywhere between 5%-20% depending on the type of mortgage you have.

But if you’re tired of renting and ready to own your home, know that there are many community and government programs available for residents of Oklahoma—designed specifically to help first-time and low- to moderate- income home buyers achieve their dreams of owning a home. In this post we’ll explore some of the many options that may be available to you, from programs to help with closing costs and down payments to loans that lower the bar for buyers with fewer restrictions and lower costs.  

Down Payment Assistance Program Options

Down payment assistance is a form of financial support offered to home buyers to help with the initial payment of purchasing a home. Often (but not always!) reserved for first-time or low- to moderate-income homebuyers, the goal of these programs is to make homeownership more accessible.

Some programs are open to anyone within an income bracket or state. Others are reserved for specific municipalities or geographic areas. While some programs are popular and common, there may be other regional programs that are not widely known. Oftentimes your real estate agent or local lender can point you in the direction of smaller programs you may qualify for. 

Forms of Down Payment Assistance (DPA)

Down payment assistance can come in a few different forms.

• Grants: Some DPAs provide outright grants that do not need to be repaid that can cover a portion of the down payment or closing costs.
• Low-Interest Loans: Some programs offer low-interest, no interest, or deferred-payment loans. They may not require repayment until you sell the home or refinance.
• Forgivable Loans: These DPA loans may be forgiven after a certain period if the homeowner meets specific conditions, usually by residing in the home for a certain number of years.
• Down Payment Matching Programs: Some organizations provide matching funds based on the amount the homebuyer can contribute. 

Assistance may be offered through community or nonprofit organizations, government agencies, and even employers.

Home Buying Costs that DPAs Can Cover

Because the associated costs of buying a home—beyond your monthly mortgage payment—can become a hurdle to homeownership for many, down payment assistance programs serve an essential role. What expenses do homebuyers typically face at their closing? Beyond the down payment, closing costs and fees may include:

• Loan origination fees
• Escrow account fees
• Title insurance
• Appraisal fees
• Underwriting fees
• Loan processing fees

Depending on the buyer's situation, some closing costs or fees may be negotiable or paid by the seller (called a “sellers assist”).

Down Payment Assistance Programs in Oklahoma

Fortunately, there are options out there to provide assistance (in addition to special mortgage options with lower down payment requirements—we’ll talk about those later!).

Oklahoma Housing Finance Agency (OHFA) Loan Programs

With mortgage loan products that include 3.5% of the total loan amount to be used for down payment and closing costs, OHFA offers options for income-eligible borrowers to help fund their home purchase. Teachers, law enforcement, firefighters, emergency medical technicians, and state employees may qualify for a special interest rate. Borrowers must have a credit score of 640 or higher. 

REI Oklahoma Gift 100 Program

REI Oklahoma’s down payment assistance can come in the form of a gift that does not have to be repaid, in the form of a 2nd mortgage loan which will be paid back monthly over ten years, or in the form of a forgivable 2nd mortgage which does not have to be repaid if you live in the home for seven years. The kind of assistance you can receive depends on the type of loan you get for your home, and will be determined by your lender when you apply for your loan. 

Oklahoma City Down Payment Assistance Program

Looking for down payment assistance in Oklahoma City? For individuals buying within Oklahoma City’s boundaries, the city provides up to $15,000 in aid through the City Down Payment Assistance Program. Buyers must have income less than or equal to 80% of the current area median income and attend a free homebuyer education course to qualify.

First-Time Home Buyer Mortgage Loan Options

There are several loan products that don’t require that sizable of a down payment. Additionally, many of these mortgage assistance programs have more flexible credit and debt-to-income requirements, allowing more buyers to qualify, and allow for homes that may otherwise be out of reach. How does this work? 

Although mortgages are offered by your bank, they are backed by the US government, protecting lenders from default while giving homebuyers access to affordable loans. Let’s take a look at a few common loan programs offered to Oklahoma residents.

Federal Housing Administration (FHA) Loans

Not limited to first-time home buyers, but because of their flexibility, few restrictions, and low down payment requirements, a popular choice for new homeowners. To add to the appeal, FHA mortgage rates tend to be lower than those of conventional loans. 

USDA Loans

Looking to purchase a home in a rural corner of Oklahoma? USDA home loans require no down payment at all paired with affordable interest rates. There are some income and location restrictions, however many homes and households in Oklahoma qualify. Maximum annual income for a family of 1-4 in Oklahoma, Canadian, Kingfisher, and Logan counties is $110,650. To see if a property you are interested in qualifies, you can use the USDAs Property Eligibility  search tool. For more information, visit our site: USDA Home Loan Financing.

VA Loans

Another 0% down payment option with no location restrictions, VA loans are backed by the Department of Veterans Affairs and provide exceptionally affordable financing for veterans, eligible spouses, and active military personnel. In fact, VA loans offer some of the most affordable mortgage rates in Oklahoma if you qualify. For more information, visit our site: VA Home Mortgages.

Section 184 Native American Loan Guarantee Program

This federal loan program offers low interest rates, no maximum income limits, and a low down payment requirement of only 2.25%. To qualify, you must be an enrolled member of a federally-recognized Native American tribe. Additionally, you must meet certain qualification requirements including a sufficient DTI to support loan affordability, live in an eligible state (including Oklahoma), and work with a HUD-Approved Lender, such as F&M Bank. For more information, visit our site: Section 184 Native American Mortgage Loans.

Explore Your Home Buying Options with F&M Bank

Ready to buy a home? At F&M Bank we are well-versed in Oklahoma first-time homebuyer and down payment assistance programs, and we offer a variety of options to help our local residents achieve their dreams of homeownership. When you partner with us, we’ll work one-on-one with you and your agent to find the right loans and assistance for your needs, ensuring a smooth and affordable closing and a monthly payment that fits into your budget.

Explore our Home Mortgage options, contact us to speak to one of our experienced Oklahoma and Oklahoma City mortgage lenders, or stop by one of our locations in Edmond, Yukon, Guthrie, Piedmont, Crescent, Kingfisher, and Oklahoma City to get started!