USDA Loans

The United States Department of Agriculture (USDA) Rural Development operates several housing assistance programs designed to create opportunities for families to own safe and sanitary homes. This includes home loans which are either offered directly by or guaranteed by the USDA. USA Mortgage – NWA Home Lending Team offers great rates and flexible terms on Arkansas USDA loans throughout Rogers, Fayetteville, Bentonville, and Centerton.

Both USDA direct and USDA guaranteed home loans are available to residents of Arkansas. Low and moderate income households can take advantage of The USDA Single Family Housing Guaranteed Loan Program which are loans insured by the USDA. USDA Single Family Housing Direct Home Loans are available to low and very-low income households and are made directly by the USDA in the form of a subsidy. The direct loan program is also referred to as the Section 502 Direct Loan Program.

USDA Rural Development Single Family Housing Guaranteed Loan Program

The USDA Single Family Housing Guaranteed Loan Program allows low to moderate-income households to purchase, build, or rehabilitate affordable homes. Benefits of this program include zero money down, very low interest rates, and the ability to finance closing costs. Potential borrowers will need to meet a few requirements to be eligible for the USDA Guaranteed Loan Program.

  • Household income cannot exceed 115 percent of the median income for the area.
  • The home must be the borrower’s primary residence.
  • The home must be located in an eligible Rural Development area and must meet all program criteria.
  • Borrowers must have an acceptable credit history and be able to afford mortgage payments, taxes, and mortgage insurance.

USDA guaranteed loans require two types of mortgage insurance. There is an upfront fee of 2.75 percent of the purchase price as well as an annual premium. The annual premium is calculated at .5 percent of the annual mortgage balance, however it is paid in monthly installments.

USDA Rural Development Single Family Housing Direct Home Loans

The USDA Direct Loan Program is not a loan guarantee, rather it is payment assistance offered directly by the USDA. This assistance in provided in form of a subsidy and is available only to low and very-low income families. This program is meant to assist families who are unable to obtain traditional financing and who are currently without safe and sanitary housing. The USDA defines low income as being between 50 and 80 percent of the area median income (AMI). Below 50 percent of the AMI is considered very-low income. Potential USDA direct loan candidates will need to meet certain requirements to be eligible for this program as well.

  • Applicants must be without safe and sanitary housing, unable to obtain a loan from other resources, and meet specific income requirements.
  • The home must be the borrower’s primary residence.
  • The home must be in an eligible Arkansas Rural Development area.
  • The home must be 2,000 square feet or less, not have a market value in excess of the applicable area loan limit, and not have an in-ground pool.

When a borrower no longer occupies the home, or the title is transferred, the subsidy must be repaid.

Arkansas families in need of safe and sanitary housing and who are unable to obtain alternative financing can look to USDA Guaranteed and USDA Direct loans for assistance. At USA Mortgage – NWA Home Lending Team, it is our goal to make homeownership a possible for all families throughout Rogers, Fayetteville, Bentonville, and Centerton. For more information on Arkansas USDA loans, contact us today.