The following was sent to me by Brandon Fischer of VA Benefit Blog .com

Choosing the Right Home Loan Program

The average price of a home in Oklahoma ranges from $150,000 to $200,000 and varies in type from highly urban to rural, and for those seeking to purchase a home in Oklahoma there are a variety of government lending options available. The most popular government lending programs include the FHA, VA, and USDA loan programs and all three offer flexible loan terms and eligibility requirements with each program offering their own unique set of advantages and disadvantages.

The VA Home Loan

The VA home loan has helped over 18 million active duty and veteran service members achieve homeownership. Because the VA home loan program is partially backed by the Department of Veteran Affairs, the VA home loan program is able to offer flexible and competitive loan terms to eligible veterans and active duty service members regardless of credit history. Other benefits of the VA loan program include:

• No down payment required
• Mortgage insurance not required
• flexible debt-to-income ratios

In order to apply for a VA home loan, potential borrowers should meet one of the following initial requirements:

• Have served 181 days on active duty or 3 months during war time
• Or have served 6 years in the National Guard or Reserves
• Or be the spouse of a service member killed in action
• Have a Certificate of Eligibility

The FHA Loan

For first time homebuyers in Oklahoma, the FHA home loan program is available, and additionally contains multiple financing options for borrowers in different phases of the homeownership process. Borrowers can buy their first home, renovate a fixer-upper, or update their current home to meet energy efficient standards with an FHA home loan, and can even purchase manufactured housing or a mobile home. In addition to multiple financing options, FHA loans offer benefits such as:

• 3.5% down payment
• low closing costs
• down payments can be made in the form of a gift

To be eligible for an FHA loan, potential borrowers should meet most of the following:

• two years of consistent employment and steady or increasing income
• a minimum credit score of 620
• a clean credit history after filing for foreclosure or bankruptcy

The USDA Loan

For homebuyers more interested in the rural real estate areas of Oklahoma, the USDA loan home loan  is generally the most beneficial. The USDA’s Department of Rural Development offers two types of home loans to potential borrowers:  a Guaranteed Housing Loan and the Direct Housing loan for lower income households, and both are designed to optimize rural living. USDA home loan benefits include:

• Zero down payment required
• No loan limit
• No mortgage insurance required

In order to be considered eligible for a USDA home loan, potential borrowers should meet the following requirements:

• have a consistent income
• be a U.S citizen
• have an income that is within the median household income for the area

The VA, FHA, and USDA home loan programs do have flexible eligibility requirements, however most approved lenders will usually require a credit score of at least 620 to secure financing. Those with an imperfect credit history who are interested in a home loan are still encouraged to apply as each program has approved even those with a history of bankruptcy and foreclosure in the past.