USDA Loans
USDA loans are in a class by themselves when it comes to great deals on home loans. The USDA home loan program comes with some of the lowest interest and mortgage rates in the country, not to mention they are one of the only remaining home loan programs that require zero down payment. The Arkansas USDA mortgage program provides low cost home loans that suit’s a variety of options. Arkansas USDA home loans can be used to purchase a home with no down payment, refinance, renovate or repair an existing home, or even used to build a new home from scratch.
What are USDA Loans?
The USDA is short for the United States Department of Agriculture. While many people would not be wrong to think that the USDA is only in charge of grading beef and providing farm subsidiaries, they also play a significant role in the mortgage market. By providing low interest, 100% guaranteed home loans in USDA designated rural areas, the USDA is helping to spur home ownership and economic growth in one of the most struggling areas of the country. While providing this much needed economic assistance to rural communities, USDA home loans in Arkansas also offer a great opportunity for “Natural State” home buyers who are looking to get a great deal on a rural home loan.
Who is Eligible for an Arkansas USDA Loan?
If you live in the great state of Arkansas and you’re a middle to low income family, or individual, with decent credit, then there’s a good chance that you may qualify for a USDA home loan. USDA Eligibility standards are based on your current income, credit history, and what county and zip code your USDA home resides in. Because USDA loans are specifically designed for moderate to low income households, there are maximum income limits for each specific USDA eligible county.
As long as your yearly income is less than 115% of the average median income for that area, you should have no problem qualifying for a USDA loan. If your income is significantly less than the average median income you may qualify for a USDA Direct home loan which comes with lower rates, and is loaned directly from the USDA. Standard USDA loans are 100% backed by the USDA, but funded by separate lending institutions. You must also have an above average credit score of at least 640, have consistent and steady income, and have no unsettled foreclosures or bankruptcies in the past 3 years.
Lastly, to qualify for a USDA home loan your home must be located within a designated USDA rural area. USDA designated rural areas can vary from county to county but are generally any area outside of a major city with less than 20,000 residents. Please contact a USDA lender for more information.
