No down payment – 100% financing program*
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Homes in Central Oklahoma that may qualify for purchase using a USDA home loan**:
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From USDA:
What does this program do?
This no downpayment, 100% financing program assists approved lenders in providing low- and moderate-income
households the opportunity to own adequate, modest, decent, safe and sanitary dwellings as their primary residence in eligible rural areas. Eligible applicants may purchase existing homes (which may include costs to rehabilitate, improve or relocate the dwelling) or build new. USDA provides a loan note guarantee to approved lenders, encouraging participation by minimizing their risk. This program is NOT restricted to first-time homebuyers.
What properties are eligible?
• Must be located within an eligible
rural area.*
• Must be a single-family dwelling
(may include detached, attached,
PUD, condo, modular, and
manufactured).
• Must meet HUD 4000.1
minimum standards.
• No set maximum purchase
price (based solely on applicant
repayment ability).
• No set acreage limits. Must be
common for the area.
• No seasoning requirements
(“flipped” properties allowed).
Who may apply for this program?
Applicants must:
• Have a household income that
does not exceed 115% of median
household income.*
• Agree to occupy the dwelling as
their primary residence.
• Be a U.S. citizen, U.S. non-citizen
national, or Qualified Alien.
• Be unable to obtain conventional
financing with no private mortgage
insurance (PMI).
• Not be suspended or debarred from
participation in federal programs.
What are applicant qualifications?
• Income. Non-Self-Employed:
One-year history required.
Self-Employed and Seasonal:
Two-year history required.
• Assets. No downpayment or
reserves required.
• Credit. Must demonstrate a
willingness and ability to repay
debts. No set score requirement.
Alternative credit allowable for those
with no traditional credit.
• Monthly housing payment. Total
payment (principal, interest, taxes,
insurance, HOA dues, RD annual
fee) typically should not exceed
29% of gross monthly income.
• All monthly debt payments. All
payments included on credit report,
including proposed new mortgage
payment, typically should not exceed
41% of gross monthly income.
Student loan payments. Fixed
payment: use actual payment or
1% of loan balance.
Non-fixed payment (IBR, graduated,
adjusted, etc.) plans: Use 0.5% of
loan balance.
• Seller (or interested party)
contributions. Not to exceed 6% of
sales price.
• Gift funds. No limit.
What types of loan products
are available?
• Purchase existing or build new with the Single-Close construction program.
• Current USDA Rural Development loan holders can take advantage of lower rates by utilizing one of Rural Development’s refinance options.
• Interest rate is negotiated between the applicant and the lender. Rate must be a 30-year fixed rate.
• Program lending is extended to 100% of appraised value, not purchase price, so borrowers may potentially include closing costs and home repair expenses into USDA financing.
• Funds may be used for closing costs, reasonable and customary expenses associated with the purchase transaction, connection fees for utilities, tax and insurance escrows, essential household equipment, site preparation.
How do we get started?
Interested applicants can apply for a Section 502 Guaranteed Loan through any approved USDA Rural Development lender. We encourage you to contact your preferred lender and ask if they are an approved lender with USDA Rural Development.
Who can answer questions?
Applicants with questions should contact an approved lender. We encourage you to contact your preferred lender and ask if they
are an approved USDA Rural Development Guaranteed lender.
What governs this program?
• 7 CFR part 3555 – This part sets forth policies for the Single Family Housing Guaranteed Loan Program (SFHGLP) administered by
USDA Rural Development. It addresses the requirements of Section 502(h) of the Housing Act of 1949, as amended, and includes policies regarding originating, servicing, holding, and liquidating SFHGLP loans.
• HB-1-3555 – SFH Guaranteed Loan Program Technical Handbook. This handbook provides Agency staff and lenders participating in the Single Family Housing Guaranteed Loan Program with the tools needed to originate, underwrite, and
service guaranteed loans efficiently and effectively.
Why does the USDA Rural Development do this?
This program helps lenders work with low- and moderate- income families living in rural areas to make homeownership a reality. Providing affordable homeownership opportunities promotes prosperity, which in turn creates thriving communities and improves the quality of life in rural areas.
What if I don’t qualify?
USDA also offers a direct 502 purchase program which provides for subsidized payments for those applicants from households with income below 80% of MHI and who cannot qualify for a guaranteed loan. Interested applicants should contact their state USDA Rural Development office.
Tools and Resources:
To determine Property and Income eligibility: https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
*Because citations and other information may be subject to change, please always consult the program instructions listed at: rd.usda.gov. Go to the “Programs and Services” tab and then select “Single Family Housing Programs.”
**Based on the USDA Map at https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
homes may qualify but are subject to review and buyer qualifying for financing.