Purchasing your first home can be a very exciting experience. But how do you know what programs are available and how to qualify? And how do you know where to even begin? Here is a list of just a few incentives, grants, and more available to Oklahoma residents.
Incentives
In Oklahoma, homebuyers who have a mortgage and meet certain qualifications are able to receive a federal income tax credit through the Mortgage Credit Certificate Program (MCC). The amount equals 50 percent of the mortgage interest paid on the first $40,000 loan principal. There is a $2,000 annual cap, and the program is only available in Adair, Brian, Canadian, Cherokee, Cleveland, LeFlore, Pittsburg, Pottawatomie, and Muskogee counties. This incentive program is ideal for first time homebuyers in that it allows them to deduct the cost of interest after the first year they’ve owned the property.
Certain first time homeowners may also qualify for a homestead exemption against their annual property tax. It is an exemption of $1,000 of assessed value, which can be a large chunk of the tax you pay into your mortgage escrow account each year. To qualify, you must be the owner of the property on January 1st of the current year. If not, you may have to wait until the following year to apply. To find out more details, contact your local tax assessor.
Programs
There are a variety of different first time homebuyer programs in Oklahoma. One of the most commonly utilized is the OHFA Advantage Program. This program is designed to help low-to-moderate income individuals meet the dream of owning a home and help them get on the path to financial stability. The process has a strict income ratio and a minimum credit score requirement of 640. Those interested can call the Homebuyer Hotline at 1-888-937-1122 for more information.
But that isn’t the only option. The Rural Development Program helps individuals purchase homes in certain communities. Those who take part must meet certain income eligibility guidelines and agree to occupy the dwelling as a primary residence. Availability of this program is determined by the zip code in which the property is located, but most suburban towns around Oklahoma City and Tulsa are included. Also, only approved lenders offer this as an option when purchasing a new home, so it is important to make sure yours is on the list before utilizing this option.
Those with past military service also have the choice to utilize their VA home loan. Current or honorable discharge is required, but the government-backed loan is ideal when it comes to purchasing a new property. It features 100 percent financing on purchases up to $417,000. Furthermore, closing costs can even be reduced and there is even a option for a zero down payment. If you ever decide to sell the home, the loan can be reused multiple times once it has been fully satisfied. Most sellers and real estate agents really perk up their ears when hearing that a potential buyer has access to a military loan, so it is possible to use this as part of your bargaining toolbox if you decide to make an offer.
Grants & Down Payment Help
Just like with its mortgage program, OHFA also offers a variety of down payment grants. These funds are generally utilized by those who don’t qualify for a full mortgage program, but could use a bit of assistance in paying for a down payment or closing costs. Figure range from only a couple thousand dollars to well over $10,000.
Interested in moving to Oklahoma City? For those who living within the community’s borders, there is a special down payment assistance program. The Home Investment Partnerships Program is funded by HUD and can provide help up to $15,000. Special family size and income requirements do apply, and there is a special emphasis on helping seniors. The program is only available to those purchasing inside of Oklahoma City.
In addition, there are a ton of private agencies who can help with small amounts when it comes to funding the purchase of a new home. Habitat for Humanity and many local community action projects are all a great place to start if you truly need this type of assistance.
FHA Loans
Another option to Oklahoma buyers is the FHA loan. This national program is offered for first time homebuyers and is administered by local banks. This means that if you are looking to apply, you’ll want to contact your lender directly for details.
To put it simply, the FHA loan is a mortgage offered by the Federal Housing Administration. They often have fantastic interest rates and much more flexibility than traditional lending. A minimum down payment of 10 percent is required, but a low acceptable credit score makes this a prime option for those with subpar credit histories. Those with excellent credit can even benefit by only having a minimum down payment of three percent.
Of course, these are just a few of the many different options available to first time homebuyers in Oklahoma. To really get a firm picture as to what is available in your zip code, contact your lender for a full list.
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2 Point Highlight
In addition, there are a ton of private agencies who can help with small amounts when it comes to funding the purchase of a new home.
Certain property owners may also qualify for a homestead exemption against their annual property tax.
