First-Time Homebuyer Guide: Buying Your First Home in Oklahoma

1. Before You Start: Financial Readiness

Buying your first home is exciting, but the process starts long before you walk through a front door. The buyers who have the easiest time are the ones who get their finances in order first. Here is what that looks like in practice.

Check Your Credit Score

Your credit score is the single biggest factor in determining what loan types you qualify for and what interest rate you will pay. Pull your free credit reports from all three bureaus at AnnualCreditReport.com. A score of 620 or higher opens the door to most conventional loan products. A score of 740 or higher qualifies you for the best available rates, which can save tens of thousands of dollars over a 30-year mortgage.

If your score is below 620, do not rush into the market. Spend 6-12 months paying down credit card balances, correcting errors on your reports, and avoiding new credit inquiries. Every 20-point improvement in your credit score can noticeably lower your interest rate.

Calculate Your Debt-to-Income Ratio

Lenders use your debt-to-income ratio (DTI) to determine how much mortgage you can handle. There are two numbers to know. The front-end ratio is your total monthly housing cost (mortgage + taxes + insurance + HOA) divided by your gross monthly income. Most lenders want this at or below 28%. The back-end ratio includes all monthly debts (housing + car payments + student loans + credit cards) and should ideally stay at or below 36%, though FHA loans allow up to 43% in some cases.

Save for More Than the Down Payment

Many first-time buyers focus exclusively on the down payment and get blindsided by the other costs. Beyond your down payment, budget for closing costs (2-4% of the purchase price), moving expenses ($500-$2,000), and an emergency reserve. A good rule of thumb is having at least 3-6 months of mortgage payments saved after closing. This gives you a cushion for unexpected repairs, appliance replacements, or income disruptions.

Get Current on All Debts

Before you apply for a mortgage, bring all existing debts current. Late payments in the past 12 months will hurt your application. Do not open any new credit lines, co-sign loans for others, or make large financed purchases (cars, furniture, appliances) during this period. Lenders will re-check your credit before closing, and new debt can derail your approval.

Your Monthly Housing Budget

Your total monthly housing cost is more than just the mortgage payment. Use this formula to calculate your real number: principal + interest + property taxes + homeowner's insurance + PMI (if applicable) + HOA dues = total monthly housing cost. In Oklahoma, property taxes are calculated using the 11% assessed value formula: multiply your home's market value by 11%, then multiply by the local millage rate divided by 1,000, then subtract the $1,000 homestead exemption. Use our Homebuyer Cost Estimator to run the numbers for your specific situation.

2. Loan Types Explained

Each loan type has different requirements for down payment, credit score, and mortgage insurance. Knowing what is available helps you pick the right fit for your finances and the property you want to buy.

FHA Loans

FHA loans are backed by the Federal Housing Administration and are the most popular choice for first-time buyers in Oklahoma. They require just 3.5% down with a credit score of 580 or higher (or 10% down with a score as low as 500). The tradeoff is mortgage insurance: FHA loans require both an upfront mortgage insurance premium (1.75% of the loan amount, usually rolled into the loan) and annual mortgage insurance premiums for the life of the loan. Even with the insurance cost, FHA loans are still the easiest way into homeownership for buyers with limited savings or moderate credit.

VA Loans

VA loans, backed by the Department of Veterans Affairs, offer 0% down payment and no private mortgage insurance. There is a one-time VA funding fee (2.15% of the loan amount for first-time use, which can be rolled into the loan; disabled veterans are exempt). Even with this fee, VA loans offer some of the best mortgage terms available. In Oklahoma, VA loans are especially common near Tinker Air Force Base, Fort Sill, and Altus Air Force Base. Eligible borrowers include active-duty military, veterans, National Guard and Reserve members, and surviving spouses. There is no official minimum credit score, but most lenders require 620 or higher. If you have military service, a VA loan should be your first option to explore.

USDA Loans

USDA loans offer 0% down payment for properties in qualifying rural and suburban areas. In Oklahoma, many desirable suburbs fall within USDA-eligible boundaries, including Piedmont, Tuttle, Blanchard, Choctaw, Guthrie, and parts of Mustang. The program has income limits based on county and household size, and the property must be your primary residence. USDA loans require a credit score of 640 or higher in most cases. Check the USDA eligibility map to see if the area you are considering qualifies.

Conventional Loans

Conventional loans are not backed by a government agency, which means slightly stricter requirements but more flexibility in some areas. Down payments range from 3% to 20% or more. A credit score of 620 is the minimum, but 740+ gets you the best rates. Private mortgage insurance (PMI) is required if your down payment is less than 20%, but unlike FHA insurance, PMI can be removed once you reach 20% equity. Conventional loans are the best choice for buyers with strong credit and a solid down payment.

OHFA-Backed Loans

The Oklahoma Housing Finance Agency (OHFA) does not issue loans directly. Instead, OHFA works with any of the loan types above through approved lenders, adding a layer of down payment assistance on top. This means you can get an FHA, VA, USDA, or conventional loan and still receive OHFA benefits. The key requirement is that you must work with an OHFA-approved lender. More details in the next section.

3. OHFA Down Payment Assistance

The Oklahoma Housing Finance Agency is one of the best-kept secrets for first-time homebuyers in the state. OHFA provides down payment assistance of up to 3.5% of the loan amount. On a $260,000 home, that is up to $9,100 toward your down payment, which can be the difference between buying this year and waiting two more years to save.

How OHFA Works

OHFA partners with a network of approved lenders across Oklahoma. You apply through one of these lenders, and if you meet the eligibility requirements, the down payment assistance is layered on top of your mortgage. OHFA's Gold program provides a zero-interest second mortgage that becomes due when you sell, refinance, or pay off the first mortgage. The Dream program provides assistance structured as a grant that does not need to be repaid.

Eligibility Requirements

OHFA programs are available to first-time homebuyers (or buyers who have not owned a home in the past three years). Income limits vary by county and household size. The property must be your primary residence and located in Oklahoma. You must complete a homebuyer education course (available online through OHFA-approved providers). Credit score requirements depend on the underlying loan type.

Special Programs

OHFA offers reduced interest rates for certain professions: teachers (4Teachers program), first responders and law enforcement (Shield program), and state employees. Veterans benefit from VA loan eligibility, which pairs well with OHFA assistance. These profession-specific programs change periodically, so check with your OHFA-approved lender for current availability.

How to Apply

Contact an OHFA-approved lender directly. They will walk you through the application, verify your eligibility, and handle all the paperwork. You can find a list of approved lenders and current program details at ohfa.org/homebuyers or by calling OHFA at (405) 419-8207.

4. The Pre-Approval Process

Pre-approval is the first thing you should do before shopping for homes. In today's Oklahoma market, sellers and listing agents will not take you seriously without a pre-approval letter.

What Lenders Evaluate

During pre-approval, lenders examine five key areas: your credit score and credit history, income and employment stability (at least two years with the same employer or in the same field is ideal), debts and monthly obligations, assets (bank accounts, investments, retirement funds), and your down payment source and amount. They are looking for a complete picture of your ability to make monthly payments reliably.

Documents You Will Need

• Last 2 years of federal tax returns (all pages, all schedules)
• Last 2 months of bank statements (all accounts)
• Last 30 days of pay stubs
• W-2s or 1099s from the past 2 years
• Government-issued photo ID
• If self-employed: profit and loss statements, business tax returns

Pre-Qualification vs. Pre-Approval

These terms are often used interchangeably, but they are different. Pre-qualification is an informal estimate based on self-reported information. It carries little weight with sellers. Pre-approval involves a full credit pull, income verification, and asset documentation. A pre-approval letter tells sellers that a lender has reviewed your finances and is willing to lend you a specific amount. In competitive situations, a pre-approval letter carries much more weight.

Shop Multiple Lenders

Do not accept the first rate you are offered. Shop at least 2-3 lenders, including a local credit union, a national bank, and a mortgage broker. Interest rates, closing costs, and lender fees vary quite a bit between institutions. All credit inquiries for mortgage purposes within a 14-45 day window (depending on the scoring model) count as a single inquiry on your credit report, so shopping around will not hurt your score.

After Pre-Approval

Your pre-approval letter is typically valid for 60-90 days. During this period, do not change jobs, make large purchases, move money between accounts in unusual ways, or co-sign for anyone. Any of these actions can trigger a re-evaluation of your application and potentially change your approval status or terms.

5. House Hunting in Oklahoma

With pre-approval in hand, you are ready to start looking at homes. This is the fun part, but staying focused will help you avoid costly mistakes.

Work With a Buyer's Agent

A buyer's agent represents your interests throughout the transaction. Following the 2024 NAR settlement, buyers now sign a buyer-broker agreement that outlines their agent's compensation. In practice, many Oklahoma sellers still offer a concession that covers the buyer's agent fee, but you should discuss compensation terms with your agent upfront. Your agent handles property searches, schedules showings, prepares offers, negotiates on your behalf, and guides you through inspection, appraisal, and closing. Working without an agent puts you at a disadvantage, especially as a first-time buyer.

Oklahoma-Specific Priorities

When evaluating homes in Oklahoma, pay special attention to these factors that buyers in other states may not consider:

• Storm shelter: Oklahoma is in Tornado Alley. A safe room or underground shelter is a must-have. If the home does not have one, budget $3,000-$6,000 for installation.
• Roof condition: Oklahoma hail storms damage roofs regularly. Ask when the roof was last replaced, whether a hail claim has been filed, and get a roof inspection even if the home inspector says it looks fine.
• HVAC capacity: Oklahoma summers push 100+ degrees F for weeks. Verify the HVAC system is properly sized for the home's square footage and has been maintained. Replacing an HVAC system costs $5,000-$12,000.
• School district: Even if you do not have children, the school district has a big impact on resale value. Homes in top-rated districts (Edmond, Deer Creek, Yukon) command higher prices and sell faster.
• Flood zone: Check FEMA flood maps. Properties in a flood zone require flood insurance, which can add $1,000-$3,000+ annually to your housing costs.
• Commute: Oklahoma City metro traffic has gotten worse in recent years. Drive the commute during rush hour before making an offer.

Viewing Strategy

Visit neighborhoods at different times of day: morning, evening, and weekends. A neighborhood that seems quiet on a Tuesday afternoon may have heavy traffic or noise issues on a Friday evening. Attend open houses to get a feel for the market in your target areas. Do not skip homes that need minor cosmetic work (paint, carpet, landscaping). These homes are often underpriced relative to their potential because many buyers lack the vision to see past surface-level issues.

6. Making an Offer

When you find the right home, your Realtor will help you prepare a written offer. This is where having an experienced agent really pays off.

Key Offer Components

Every Oklahoma real estate offer includes these core elements: the purchase price (based on comparative market analysis of similar recent sales), earnest money (typically 1% of the purchase price in Oklahoma, deposited into escrow as a good-faith commitment), contingencies (inspection, appraisal, and financing conditions that must be met for the deal to proceed), and the closing timeline (usually 30-45 days from accepted offer).

Negotiation Strategies

Your Realtor will run a comparative market analysis (CMA) to determine a fair offer price based on recent sales of similar homes in the area. In a balanced or buyer-friendly market, you may have room to negotiate below asking price. In a seller's market with multiple offers, your best strategy is to lead with a strong, clean offer close to or at asking price.

Never waive the inspection contingency. No matter how competitive the market, skipping the inspection can cost you tens of thousands in unexpected repairs. However, you can make your offer more attractive by shortening the inspection period, increasing your earnest money, or offering flexibility on the closing date.

Multiple Offer Situations

In competitive areas (Edmond, Deer Creek, downtown OKC), multiple offers on desirable homes are common. To stand out: offer your best price upfront (avoid lowball offers that get rejected outright), include a strong pre-approval letter, offer a larger earnest money deposit to show commitment, and write a personal letter to the sellers explaining why you love their home. Personal letters still work in Oklahoma and can tip the scale when offers are close in price.

Seller's Response

After receiving your offer, the seller can accept it as-is, counter with different terms (price, closing date, repairs, inclusions), or reject it outright. If countered, your Realtor will negotiate back and forth until both parties reach agreement or decide to walk away. Most Oklahoma transactions involve at least one round of counter-offers.

7. Inspection, Appraisal, and Closing

Once your offer is accepted, the clock starts on a series of critical steps before you get the keys. Each step has a timeline and specific actions required from you.

Home Inspection ($300-$500)

The home inspection is your opportunity to identify problems before you are legally committed to the purchase. Hire a licensed Oklahoma home inspector and attend the inspection in person. A thorough inspection takes 2-3 hours for a typical home and covers the foundation, roof, electrical, plumbing, HVAC, water heater, and structural components.

Oklahoma-specific concerns: Pay close attention to foundation issues caused by Oklahoma's expansive clay soil, which swells when wet and shrinks when dry, causing shifting and cracking. Look for termite damage, which is common throughout the state (a separate termite inspection is standard and often required by lenders). Check for hail damage on the roof, siding, and windows. These are the three most expensive repair categories in Oklahoma homes.

After the inspection, your Realtor will help you prepare a repair request or negotiate a credit for significant issues. Cosmetic items are typically not part of the negotiation. Focus on structural, mechanical, and safety concerns.

Appraisal ($400-$600)

Your lender orders the appraisal to verify that the home is worth at least what you are paying for it. The appraiser evaluates the property's condition, features, and comparable sales in the area. This process protects you from overpaying and protects the lender's investment.

If the appraisal comes in at or above your contract price, everything moves forward normally. If it comes in below your contract price, you have three options: negotiate with the seller to lower the price to the appraised value, pay the difference between the appraised value and contract price out of pocket, or exercise your appraisal contingency and walk away with your earnest money refunded.

Final Steps Before Closing

In the weeks between your accepted offer and closing day, stay in close contact with your lender. Respond to document requests immediately. Do not make any financial changes (no large deposits, no new credit accounts, no job changes). Purchase homeowner's insurance and provide proof to your lender. Schedule your utilities to transfer on the closing date.

Closing Day

In Oklahoma, closings are handled by a title company. You will conduct a final walkthrough 24-48 hours before closing to verify the home's condition and that any agreed-upon repairs have been completed. At the closing table, you will sign a stack of documents, wire your closing funds (down payment + closing costs, typically 2-4% of the purchase price), and receive the keys to your new home.

Closing costs in Oklahoma typically include: title insurance, lender fees (origination, underwriting, processing), prepaid property taxes and insurance, recording fees, and any HOA transfer fees. Your lender is required to provide a Closing Disclosure at least three business days before closing, itemizing every cost. Review it carefully and ask questions about anything you do not understand.