Arkansas USDA Loan

A rural development loan, or USDA loan, is a mortgage backed by the U.S. Department of Agriculture (USDA). Rural development loans are offered by private lenders that the USDA has approved.

A USDA loan can be the perfect stepping stone for potential homebuyers looking for a home in eligible rural areas. Because it’s backed by the USDA, this type of loan has the major advantage of requiring no down payment, making homeownership a more accessible dream for some families.

What Is a USDA Loan?

USDA loans are intended to make well-built, affordable housing accessible for rural communities. Homeowners can use rural development loans to buy a home in qualifying rural or suburban areas.

How Much Can I Borrow With A USDA Loan?

USDA loans allow for a $0 down payment, and homeowners can receive up to 100% financing. Instead of a mortgage insurance premium (MIP), USDA-guaranteed loans are charged an annual guarantee fee. This will usually be included in your monthly loan payment.

Qualifications for USDA Loans in Arkansas

To qualify for a USDA loan in Arkansas, you’ll need to meet several key factors, such as income, credit history, and debt-to-income ratio. The most important factor for eligibility is the location and size of the home.

USDA loans are intended for rural areas, but they may be closer to you than you think. A home doesn’t have to be on a farm to qualify. Rural areas and some suburban areas are eligible for rural development loans. 

The cost and size of a home can also impact eligibility. When purchasing a home, it must be less than 1,800 square feet and valued below the region’s loan limit. The loan limit varies based on county, but you can always check the limit for Arkansas counties through the USDA.

A home purchased with a USDA loan must be a primary residence. A USDA loan cannot be used for a secondary residence or rental property.

A good credit score is a common requirement for most home loans. Most USDA lenders look for a minimum credit score of 640, though having a credit score below 640 doesn’t mean you won’t qualify.

Apply For a USDA Development Loan Today

USDA loans can be a great mortgage option for qualifying individuals. With lenient credit score requirements and a $0 down payment, it can help to make safe housing affordable in rural Arkansas.

You should look into your eligibility if you think you may qualify for a USDA loan. Arkansas Federal Credit Union can help you determine if you qualify. You may also be surprised to find more areas of Arkansas included in USDA loans than you think!
Visit one of our local branch offices or contact us online to learn more about your loan options.