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Are you looking for additional funds to afford your first home? If so, then maybe State bond programs could be what you need to make homeownership a reality. These programs are regulated by government housing agencies that coordinate with local lenders.
State bond programs are subsidized by the government to enable lenders to approve home loans to lower income families and individuals. Funds usually come from the sale of mortgage revenue bonds or from the state’s housing budget.
Depending on the state, homebuyer applicants may either apply at the local housing agency or go directly to the participating lender or bank. Since the goal of these programs is to help those with a lower income, mortgage interest rates would also likely be lower, when compared to conventional home loans.
Aside from these low-interest loans, funding assistance can also be made available to cover down payment and even closing costs, as qualified borrowers are able to make lower down payments. Homebuyers with below average credit scores may also be eligible for state bond programs in lieu of regular mortgage financing.
Generally, most states have these programs available even for moderate-income homebuyers. Federal law states that homebuyers must meet certain requirements so they can qualify for state-sponsored home loans. Typically, the applicant must meet the annual income limits and take homebuyer education courses. Approved homebuyers must also be the ones who will occupy the property.
In Oklahoma, the state bond funds are made available through the Oklahoma Housing Finance Agency (OHFA). First-time homebuyers in Oklahoma can apply for the OHFA Advantage home loan through participating lenders throughout the state. Since 2012, the mortgage interest rate has dropped down from 4% to 3.5%.
Through the OHFA website, Oklahoma homebuyers can check if their income meets the limit requirements. A list of approved lenders can also be found on the website. These lenders will then verify the qualifications. The minimum credit score for Oklahoma’s state bond program is 640.
Upon qualification, OHFA will provide either 3.5% or 5% of the loan amount for the down payment. Homes that can be purchased through this program are single-family homes (new/existing), condo units, and mobile homes. However, the funds cannot be used for manufactured homes and foreclosures. The maximum purchase price is $276,100.
Just like other bond programs being offered in other states, Oklahoma applies a 30-year, fixed rate mortgage for this assistance. Loans are subject to availability, but it is applied across its 77 counties. Depending on the homebuyer’s income, a closing cost fund ($1,500 or $2,500) may be provided as well, if the Freddie Mac HFA Home Possible program is also used.
Even better, is that the OHFA provides the down payment assistance as a true gift. Homebuyers are not required to repay the covered down payment and there is no review fee for the loan.
Moreover, the first-time homebuyer requirement is waived for targeted areas in Oklahoma, which includes Atoka, Caddo, and Bryan County. This is because the federal government aims to revitalize the housing industry in these areas.
With enough support from the government, state bond programs allow minimum wage earners to afford homeownership. Typically, eligible borrowers are those whose total household income does not exceed 115% of the state’s median income. Some states have readily available funds, while some offer these bond programs on a first come, first served basis.
Financial advisors and loan officers can assist homebuyers applying for bond loans. Local real estate agents know which local lenders participate in state bond programs. It is usually better to ask the local agents first because most of them have already worked with reputable lenders in the past.
If you’re looking for more information on how State bond programs can help you become a homeowner or just looking for a home and affordable mortgage options, I will gladly assist you. Call or email me today.
Brian A. Allen is a Realtor and is full of energy, excitement and zeal for every sale. He spent most of his career in marketing and now applies that skill set to the homes his clients want to sell. Click here to learn more about Brian A. Allen