The Arkansas USDA loan (also called a 502 Guarantee or Rural Development Loan) is a government-insured mortgage program that allows home buyers to purchase a home with NO Money Down.
In fact, USDA is one of the last 100% financing home loan available to qualified buyers and allow for all closing costs to be either paid for by the seller or financed into the loan. Furthermore, USDA offers some of the lowest fix interest rates of any loan on the market today.
To be eligible for it in Arkansas, the homebuyer must purchase a home within the eligible rural areas on the outskirts of Little Rock, Fort Smith, Fayetteville, Springdale, and Jonesboro. Loan applicants will also need to have a household income that does not exceed the established limits where the home is located. Let’s take a look at the highlights and requirements of the USDA program.
- 100% – ZERO down loans. Unlike conventional loans and even FHA, USDA Home Loans do not require any down payment. This is especially beneficial for first-time homebuyers. Saving up a down payment can be very difficult. Utilizing a USDA Home Loan means that is no longer an issue.
- Seller contributions up to 6% towards home buyers closing costs.
- Must be a Primary Owner-Occupied Residence – not a working farm, investment home, or vacant land.
- Rural areas are generally those with less than 25,000 or less per capita – this includes MOST of Arkansas and its small towns/cities. Contact us below to discuss your location in detail.
- Income limits are set per County. For example, in Pulaski County, a household with 1-4 family members is allowed an annual income of up to $103,500 (through 2023) with some allowable deductions for reducing the income if needed. The loan is a “means-tested” program, which states that you or your household can’t make too much money. There are allowable income adjustments for minor children (family size), childcare expenses, and elderly family members. Most moderate to middle-income families WILL be eligible. You can easily check income limits for your family size, state, and county on the USDA Loan income eligibility website.
- Credit does not need to be perfect – but there are minimum credit score requirements of 620 for most lenders.
- The appraisal will be required for a purchase home loan, but not USDA refinance. Plumbing, HVAC, roof, and electric must be adequate for home occupancy. The dwelling must also be free from termites, WDO, and dry rot.
- You do not need to be a first-time homebuyer to apply. But if you own another residence, the purchase of a second home would need to be approved. USDA typically will only allow a second residence if the other home is inhabitable or the commute time to work is much farther than that of the home owned currently.
- USDA loans have very low-interest rates – 30-year fixed mortgages.
- Conforming Loan amounts – up to $726,200. Buyers qualify based on the debt to income.
- Very Low monthly mortgage insurance, PMI is half the cost of FHA loans.
Please reach out to us with questions by calling Ph: 800-743-7556 or just submit the Info Request Form on this page for speedy service.
Happy to serve home buyers nationwide including AR: Little Rock, Fort Smith, Fayetteville, Springdale, Jonesboro, North Little Rock, Conway, Rogers, Pine Bluff, Bentonville, Hot Springs, Benton, Sherwood, Texarkana, Jacksonville, Russellville