Are you a first-time homebuyer in Arkansas? Do you want to know the mortgage programs and payment assistance of homebuyers in Arkansas? In this article, let us look into the First-Time Homeowners loan Arkansas and the requirements.

Buying a home is a huge investment, so of course, you’d want the best information for suitable financing options before purchasing the home.

Getting a home loan is not a challenging task, you but a borrower should not break the budget while purchasing the home. If you choose a financing option to buy a home, you should look into the mortgage interest rate, credit scores, and other requirements.

How to Qualify for a First-Time Homeowners Loan Arkansas?

Every financing option has different requirements. For home equity loans, borrowers should have equity percentage and assets. If you borrow FHA loans and utilize government programs, the requirements may be less, but will also incur more limitations. 

Here are the common requirements in all financing options to qualifying for a home loan in Arkansas:

  • Credit score
  • Income source
  • Employment
  • Equity percentage

Loan Assistance Programs Arkansas – First-Time Homeowners Loan Arkansas

Down Payment Assistance

Arkansas has some conventional loan programs that provide funds to the homebuyers to cover the closing costs, down payment, and all upfront costs. Most of these loan programs are for homebuyers who have low to moderate incomes. 

Check these out:

ADFA Down Payment Assistance

ADFA down payment assistance programs provide fixed mortgage assistance to borrowers. The fixed mortgage is for 30 years and is for borrowers who have low to moderate income. This program is designed to assist with upfront costs from $1,000 to $6,000. Here are a few requirements to qualify for the ADFA down payment assistance program.

  • Borrowers should have completed the home buyers’ counseling programs
  • Credit score should be at least 640.
  • 45% is the maximum debt to income ratio allowed.
  • The purchase should be the borrowers’ planned primary residence.

Arkansas Dream Down Payment Initiative

Arkansas Dream Down Payment Initiative is one of the assistance programs that provide loans for applicants who have a very low income. The assistance fund in the ADDPI program is 10% of a home purchase.

First-time homebuyers will also receive a certificate Mortgage Credit Certificate from the Arkansas Dream Down Payment Program. Homebuyers should meet certain requirements to qualify for the ADDI programs,

  • ADDI program is for homebuyers who have low incomes. If the income limit exceeds the maximum, homebuyers will not qualify for the program. 
  • In 2020 (or whatever), allowed income to qualify for the ADDPI was a maximum of $48k a year for a married couple, and $39k a year for a single person.
  • Loan borrowers should qualify for the mortgage.

Crawford-Sebastian Homeownership Center

Crawford-Sebastian Homeownership Center provides funds for homebuyers who have low to moderate-income(Income should not exceed beyond $137,000). On average, in one year, 250 families benefit from this loan program and purchase their own homes. Crawford-Sebastian Homeownership Center offers the following programs for homebuyers:

  • Mutual self-help to house
  • Housing counseling
  • Education
  • Down payment assistance
  • Homebuyer education

First-Time Homeowners Loan Arkansas

FHA (Federal Housing Administration) loan

FHA loan is for homebuyers who have a very low credit score. If you are buying a home with less than a 580 credit score, then with this loan the down payment requirement would be only 10%. FHA loans have a few requirements to qualify:

  • The home you are buying should be a primary residence.
  • The homebuyers should have two years of employment history.
  • You need to have a maximum of 43% debt to income ratio.
  • If you have bankruptcy or foreclosures, you will not qualify for the loan.

VA Loans Arkansas

US Department of Veteran Affairs provides VA loans for veterans and their spouses to buy a home. Veteran loans Arkansas has a few limitations and requirements. Obviously, only veterans qualify for this loan.

Arkansas VA loans had more limitations before 2020, but now the loan amount limitation is $647,200. VA loans are guaranteed by the Department of Veteran Affairs.

  • VA loans don’t have minimum credit score requirements.
  • You don’t have to pay mortgage insurance if you borrow Veteran loans.
  • There are no prepayment penalties and closing costs.
  • The interest rates in VA loans are low.

Home Equity Loans Arkansas

Home equity line of credit and home equity loans are not only for first-time home buyers. If you have a property and qualifying assets, you may be able to use that equity for a loan.

Arkansas Federal Credit Union provides home equity loans in Arkansas. A home equity loan makes your home as collateral and provides you with the loan amount. Here are a few of the  requirements to qualify for a home equity loan in Arkansas:

  • Homebuyers should have 15% to 20% of the equity in the home.
  • The credit score requirement for a home equity loan is around 620.
  • The DIR (Debt to Income Ratio) expected is around 40% or lower.

Home Equity Line of Credit Arkansas

Homebuyers should borrow not more than 80% of the equity toward the whole amount. Home equity lines of credit have fluctuating interest rates.

  • Borrowers should have at least a 680 credit score for home equity line of credit.
  • Borrowers should have sufficient income. If you have a low-moderate income, you should go for loan programs.

Final Word

Buying and improving homes is a significant investment in everyone’s life. Arkansas home program assistance will help a lot of first-time homebuyers to buy homes without breaking their budget.

Other than the secured home loans and programs, there are unsecured financing options for homebuyers. An unsecured personal loan will not have so many requirements and personal loan lenders will also provide loan amounts for the borrowers who have low to moderate-income.

Personal loans are the best financing option for home improvements as well.TGUC Financial offers personal loans for the borrowers to do home improvements and renovations. If you want to borrow a personal loan for home remodeling, TGUC Financial personal loan is one of the best options.

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Frequently Asked Questions

How much home loan can you get with a 700 credit score?

Borrowers will get the loan amount at the rate of 6.66% with a 700 credit score.

How much downpayment do you get on a house in Arkansas?

Homebuyers will get from 5% to 20% payment for conventional loans. The downpayment will depend on the credit report.

What is the minimum credit score you need to buy a home in Arkansas?

The minimum credit score home buyers need to buy a home is around 500. If you have a credit score of less than 500, you will not be able to qualify for loans.