New Program Offers Construction Loans for Single-Family Homes in Oklahoma

A new program called the Oklahoma Housing Finance Agency (OHFA) has recently launched an initiative to boost the availability of single-family residences for individuals and families across the state. The program, which was established by Oklahoma House Bill 1031, offers zero percent interest, 24-month construction loans to builders of single-family homes for sale and rent.

The Benefits of the Program

One of the main advantages of this program is the provision of gap financing, which aims to incentivize the production of rental housing throughout Oklahoma. Additionally, it aims to remove barriers to homeownership caused by the lack of available funds for down payments and closing costs.

The Loan Details

OHFA representatives held an informational session on August 7th to explain the program and the application process to local builders, elected officials, and finance professionals. Under this initiative, for-profit and not-for-profit homebuilders committed to constructing homes can receive a no-interest recourse loan that covers 90% of the financing, while builders need to provide the remaining 10% upfront.

Fund Allocation

The program has earmarked a fund of $215 million, which is divided into different categories. $63,550,000 is allocated for developer loans to build rental housing, $40 million is allocated for consumer down payment and closing costs assistance, $10,750,000 is allocated for administrative costs, and $100,700,000 is allocated for no-interest loans to homebuyers of single-family homes. It is important to note that only single-family homes for sale or rental are eligible, and multihousing buildings are excluded from the program.

Regional Allocation

Darrell Beavers, the housing development director, explained that 25% of the fund is reserved for urban areas, while the remaining 75% is allocated to rural areas.

Application Timeline

If Gov. Kevin Stitt approves the program rules, applications should be available by January 2024. To ensure timely implementation of the program, construction must begin within nine months of receiving the loan.

Outreach and Marketing

To reach potential homebuyers and renters, the program will utilize various marketing strategies, including outreach through employers, real estate agents, and community groups.

Access to Assistance

Builders have the freedom to sell homes to anyone. However, if a homebuyer requires assistance with down payments or closing costs, the program provides the necessary funds. Valenthia Doolin, homeownership director, emphasized that individuals purchasing homes through this program can access their assistance program for financial support.

Qualifications and Costs

Homes between 1,000 and 2,000 square feet qualify for the program, with a cost not exceeding $160 per square foot. Linda Cheatham, executive director of Tahlequah Area Habitat for Humanity, stated that the organization can build a home for $120 per square foot, taking into account volunteer labor. The attendees generally agreed that a home could be built for $160 per square foot.

Tahlequah’s Housing Needs

Doolin sought the opinion of Mayor Suzanne Myers regarding the housing needs of Tahlequah in the next 24 months. Myers explained that both single-family housing and rentals are necessary, but there is a significant gap in affordable homes in the $140,000-$200,000 price range, particularly for single parents.

Potential Impact

The program anticipates approximately 478 homes being produced in the first round of funding, with subsequent years seeing $100,700,000 lent to homebuilders in funding rounds. According to the program materials distributed during the session, this cycle will continue indefinitely.

How AI legalese decoder Can Help

The AI legalese decoder can play a crucial role in simplifying the information and processes related to the OHFA program. It can help builders and prospective homebuyers navigate the complexities of legal jargon and understand the program’s requirements, eligibility criteria, and the application process. By decoding legalese into plain language, the AI legalese decoder improves accessibility and ensures that individuals can fully comprehend and participate in the program.