Midwest City USDA Loan

Scissortail Financial offers USDA loans in Midwest City with zero down payment and competitive rates. We’ll help you navigate the process effortlessly.

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What is a USDA Loan?

A USDA loan is a government-backed mortgage designed to assist eligible homebuyers in rural and suburban areas by offering zero-down financing. This program, supported by the U.S. Department of Agriculture, makes purchasing a home more affordable with low interest rates, reduced mortgage insurance costs, and flexible credit qualifications.

Advantages of a USDA Loan:

  • 100% financing available – No down payment required.
  • Lower monthly costs – Competitive interest rates and reduced mortgage insurance fees.
  • More lenient credit standards – Easier approval compared to conventional mortgages.
  • Property-based eligibility – Many homes in Midwest City’s outlying areas may qualify.

For homebuyers in Midwest City, this loan program offers an affordable way to purchase a home without the burden of a large down payment. Scissortail Financial can help determine whether a USDA loan is right for you.

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Midwest City USDA Loan Requirements

To be eligible for a USDA loan in Midwest City, applicants must meet both property and borrower qualifications. Below are the key requirements:

Property Eligibility

USDA loans have location-based requirements, meaning the home you’re purchasing must be in a qualifying rural or suburban area. While some parts of Midwest City may not be eligible, many outlying neighborhoods and surrounding communities meet USDA guidelines. Scissortail Financial can help determine if a property qualifies.

Credit Score Standards

There is no official minimum credit score for USDA loans, but most lenders look for a score of 640 or higher for a smoother approval process. Borrowers with lower scores may still qualify but will likely need to provide additional documentation to show financial stability.

Debt-to-Income (DTI) Guidelines

Most USDA lenders require a DTI ratio of 41% or lower, meaning your total monthly debt payments (including your new mortgage) shouldn’t exceed 41% of your gross monthly income. However, borrowers with strong credit scores, additional savings, or steady employment may be approved with a higher DTI ratio.

Employment & Income Verification

Applicants must show at least two years of stable income or employment history. Lenders will verify this using:

  • Recent pay stubs
  • W-2s or tax returns
  • Profit-and-loss statements for self-employed borrowers

Mortgage Insurance Costs (Guarantee Fees)

Instead of traditional private mortgage insurance (PMI), USDA loans have:

  • An upfront guarantee fee of 1% of the loan amount, which can be rolled into the loan.
  • An annual fee of 0.35%, which is paid monthly as part of your mortgage payment.

These fees are lower than FHA mortgage insurance costs, making USDA loans a more affordable option for eligible buyers.

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Midwest City USDA Loan Income Limits

Since USDA loans are meant to assist moderate-income families, there are household income limits to qualify. These limits include the combined income of all working adults in the home, even if they aren’t on the mortgage.

  • 1-4 person household: $112,450
  • 5+ person household: $148,450

Borrowers whose income exceeds these limits may still qualify if they have eligible deductions such as:

  • Childcare expenses
  • Medical costs for elderly or disabled household members
  • Other qualifying deductions

If you’re unsure whether your household meets the USDA income limits, Scissortail Financial can help assess your eligibility and explore possible solutions.

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Midwest City Loan Programs

Scissortail Financial provides multiple home loan options for buyers in Midwest City, ensuring there’s a financing solution for every homebuyer’s needs.

USDA Loans

For eligible borrowers, USDA loans provide 100% financing, competitive rates, and lower mortgage insurance, making them a great choice for those looking to buy in designated rural and suburban areas.

Conventional Loans

For buyers who don’t qualify for USDA loans or prefer a non-government-backed mortgage, conventional loans offer competitive interest rates and flexible terms. A minimum 3% down payment is required, and PMI can be removed with a 20% down payment.

FHA Loans

FHA loans are a popular option for buyers with lower credit scores or limited down payment funds. These loans require only 3.5% down and have more lenient approval criteria.

VA Loans

For eligible veterans, active-duty military members, and their families, VA loans provide zero-down financing, no PMI, and some of the most favorable interest rates available.

Refinance Loans

Current homeowners can explore refinancing options to lower monthly payments, secure better loan terms, or access home equity. The USDA Streamline Refinance program is also available for homeowners looking to reduce their mortgage costs.

First-Time Home Buyer Programs

First-time buyers in Midwest City may qualify for special financing programs, including down payment assistance, reduced mortgage insurance, and flexible approval requirements.

Investment Property Loans

For buyers looking to expand their real estate portfolio, investment property loans provide specialized financing options to fund rental properties and income-generating homes.

Second Home Loans

If you’re considering purchasing a vacation home or second residence, Scissortail Financial offers mortgage solutions with competitive rates and flexible terms.

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FAQ's

Norman USDA Loan FAQs

Who qualifies for a USDA loan?

While the USDA does not set a minimum credit score, most lenders prefer a minimum credit score of around 640 for a smoother approval process.

Do USDA loans require a down payment?

No, USDA loans offer 100% financing, meaning you can purchase a home without a down payment.

Can I use a USDA loan to buy a home in Oklahoma City?

Some areas within Oklahoma City may not qualify, but many outlying neighborhoods and surrounding communities are eligible. Scissortail Financial can help you check USDA eligibility for specific properties.

What credit score do I need for a USDA loan?

Most lenders prefer a 640 or higher credit score for streamlined approval, but borrowers with lower scores may still qualify with additional documentation and compensating factors.

Are there income limits for USDA loans?

Yes. To qualify, household income cannot exceed:

  • 1-4 person household: $112,450
  • 5+ person household: $148,450

USDA considers the income of all adult household members, even if they are not on the loan.

Can I refinance my USDA loan?

Yes, USDA loans can be refinanced through the USDA Streamline Refinance Program, which reduces paperwork and allows eligible borrowers to lower their interest rates.

 

What are the mortgage insurance costs for USDA loans?

Instead of traditional mortgage insurance, USDA loans require:

  • Upfront Guarantee Fee: 1% of the loan amount (can be rolled into the loan).
  • Annual Fee: 0.35% of the remaining loan balance, paid as part of your monthly mortgage payment.
Can I use a USDA loan for a second home or investment property?

No, USDA loans are only for primary residences. They cannot be used for vacation homes, second homes, or rental properties.

Are USDA Loans Only for First-Time Homebuyers?

No, USDA loans are available for both first-time and repeat homebuyers, as long as they meet the income and property eligibility requirements.

How long does it take to close a USDA loan?

The typical closing time for a USDA loan is 30-45 days, depending on the lender, property eligibility, and loan processing time.

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