FHA Loans

The goal of the Federal Housing Administration (FHA) is to improve the housing market and protect FHA-approved lenders from borrower default. This is achieved by insuring loans offered by FHA-approved lenders across the country. The FHA has grown to become the largest insurer of mortgages in the world, having insured over 34 million mortgages since its inception in 1934. USA Mortgage – NWA Home Lending Team offers some of the best rates and terms on FHA Loans throughout Rogers, Fayetteville, Bentonville, and Centerton.FHA loans tend to be very popular among first-time homebuyers but many others will find they can benefit from FHA-insured loan programs as well. FHA loans can be used for a number of purposes including the purchase of a new home, financing special renovation projects, and reverse mortgages. Current FHA loan holders also have refinancing options available. Cash-out refinances are available to those in need of extra cash for expenses such as home repairs. For those who are looking to capitalize on lower interest rates, streamline refinances are available.

First-time homebuyers often prefer FHA loans because of their relaxed credit requirements and low down payment options. With a down payment of 3.5% and a credit score as low as 580, a first-time homeowner could potentially qualify for an FHA loan. If an applicant does not have the cash on hand to cover the down payment requirement, it can even be gifted from a family member.

Arkansas FHA Loan Requirements

  • Credit Score –Borrowers will need a credit score of 580 or higher in most cases. Those with a credit score between 500 – 579 may be able to qualify, but a down payment of 10% may be needed.
  • Income Requirements – A debt-to-income ratio of 43 percent or less is needed. Debt-to-income ratios as high as 50 percent may be approved in special circumstances.
  • Down Payment – If credit score requirements are met, a down payment of 3.5% is minimum. Those who do not meet the minimum credit score requirements may be required to make a larger down payment.
  • Property Requirements – All properties must meet certain safety, security, and soundness (structural integrity) requirements set forth by the FHA.

Two mortgage insurance premiums (MIP) are required with each Arkansas FHA loan. 1.75 percent of the home’s purchase price is due as an up-front premium. This MIP is automatically added to your loan balance by the FHA. The increase in your total loan amount as a result of the MIP addition does not affect the calculation of your loan-to-value (LTV) ratio. An annual insurance premium is the second MIP due. Although this MIP is calculated annually, it is paid monthly. The annual MIP is based on factors such as the total loan amount, LTV ratio, and the length of the mortgage. This premium will fall between .70 percent and 1.05 percent of the amount you borrow.

Arkansas FHA Loan Limits by County

County Single-Family Two-Family Three-Family Four-Family
Benton $275,665 $352,950 $426,625 $530,150
Washington $275,665 $352,950 $426,625 $530,150

At USA Mortgage – NWA Home Lending Team, we are committed to helping first-time homebuyers as well as current homeowners throughout Rogers, Fayetteville, Bentonville, and Centerton with all of their FHA loan needs. Contact us today with any questions you may have regarding Arkansas FHA loans or to begin the pre-qualification process!