Updated November 25, 2020
3 min read
Whether you are looking to settle in Arkansas’ lowlands or highlands, purchasing a home is a big and often worthwhile investment. An FHA loan in Arkansas is one mortgage option that has many Razorbacks calling the hogs.
The FHA loan program allows buyers in Arkansas the ability to avoid high down payments and work with not-so-perfect credit scores when financing their home. Check out the information below to see if an Arkansas FHA loan is right for you.
Why Consider an FHA Loan in Arkansas
With a median home cost of nearly half the national average, it’s no wonder the total value of FHA loans in Arkansas was $19 million! Regardless if you want to be surrounded by wildlife in the Ozark Mountains, or maybe in the college town of Fayetteville, living in Arkansas is a great choice.
Benefits of using an FHA Loan in AR
- FHA loans are great for first-time homebuyers, especially those who can’t or don’t want to put down a large down payment.
- FHA mortgage rates are typically lower than conventional mortgage rates.
- FHA down payment and credit score requirements are typically lower than conventional loans
- Sellers can contribute up to 6% of the purchase price or appraised value (whichever is less) towards the buyers’ closing costs.
- FHA loans are assumable
FHA Loan Limits in Arkansas
It’s important to have an idea of how much you can borrow before you begin shopping for your new home. For all of Arkansas the maximum FHA loan limit is $314,827. This limit is adjusted yearly, and can vary depending on areas with high cost of living. However, Arkansas baseline limit applies in all counties.
Are You Eligible for an FHA Loan in AR?
You may be eligible for an FHA loan, if you:
- Have 2 years of steady employment, preferably with the same employer.
- Have had steady income (or increasing income) in the past two years.
- Have had less than two 30-day periods of late payments on your credit report.
- Have declared bankruptcy no less than two years ago and have maintained good credit since.
- Have not been a party in a foreclosure for at least three years and have maintained good credit since.
- Anticipate your mortgage payment will be equal to or less than 30% of your gross
What Do You Need to Apply for an FHA Loan in AR?
Buyers must be able to provide the following information and documents as requested by lenders:
- The addresses of all your residences over the past two years.
- The names of your employers over the past two years.
- W2's for the past two years and current paycheck stubs.
- Your current gross monthly salary.
- Your Social Security Number.
- Names, addresses, and account numbers with balances on all checking and savings accounts.
- Addresses and loan information of any other real estate you owned.
- Self-employed individuals will need to provide personal tax returns for the past two years and a current income statement and balance sheet for the business.
- Students will need to provide evidence of enrollment. If you have student loans, you need to provide verification information.
Note: Facts and figures sourced from the latest statistics available at the time of this writing including data from the United States Department of Labor, United States Census Bureau and the United States Department of Housing and Urban Development.