Lawton USDA Loan

To qualify for a USDA loan in Lawton, applicants must meet property, income, and credit requirements.

Property Eligibility

Unlike conventional loans, USDA mortgages are restricted to homes in eligible rural and suburban locations. While some parts of central Lawton may not qualify, many surrounding neighborhoods and nearby areas do. Scissortail Financial can verify a property’s USDA eligibility.

Credit Score Standards

USDA loans don’t have a fixed credit score requirement, but most lenders prefer a minimum of 640 for a faster approval process. Borrowers with lower scores may still qualify but could need:

• Larger cash reserves or a bigger down payment.
• A consistent history of on-time payments for rent, utilities, or other credit accounts.
• Stronger financial compensating factors, such as savings or low debt obligations.

Debt-to-Income Ratio (DTI) Limits

Lenders generally require a maximum DTI ratio of 41%, meaning your total monthly debt payments (including your future mortgage) should not exceed 41% of your gross income. However, some applicants with higher credit scores or additional assets may qualify with a higher DTI.

Employment & Income Verification

Applicants need to demonstrate at least two years of steady income or employment history. Lenders verify this by reviewing:

• Recent pay stubs
• W-2s or tax returns from the past two years
• Profit-and-loss statements (for self-employed borrowers)

USDA Mortgage Insurance (Guarantee Fees)

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

• A 1% upfront guarantee fee (which can be financed into the loan).
• A 0.35% annual fee, included in the monthly mortgage payment.

These lower fees make USDA loans more affordable compared to FHA and conventional mortgages.