USDA Direct Loans (also known as USDA Section 502 Direct Loans) are a mortgage program that assists low- and very-low income individuals buy decent, safe, and clean housing in rural areas. This is done through payment assistance which increases a borrower’s ability to repay. That payment assistance can be best described a subsidy which lowers the mortgage payment for short periods. The amount of assistance largely depends on the adjusted family income. USDA Direct Home Loans in Arkansas don’t work in the same manner as USDA Guaranteed Loans in Arkansas. The USDA Guaranteed Loan Program is a more popular option and can be used for a wider range of applicant incomes.Arkansas USDA Direct Loans are 100% financing mortgages. Unlike Guaranteed USDA Loans, applicants must have low or very low income to qualify for Direct Loans.

Arkansas USDA Direct Loan Requirements

USDA Direct Loans are a mortgage program available for low-income individuals to buy homes in rural areas. USDA defines low- or very low income as anything between 50% and 80% of the Area Median (AMI). The statewide median income was recently reported as $47,597 in Arkansas, but this number may differ from one county to the next. For home buyers that meet those requirements, USDA Loans are a zero-down mortgage, meaning there’s no down payment. To be eligible, applicants must also meet the following requirements:

  • You don’t presently have decent, clean, sanitary and safe housing.
  • You can’t get another mortgage from a different source with terms and conditions reasonably expected to be met.
  • The subject property must be your primary residence.
  • You must be legally eligible for a mortgage.
  • You must meet citizenship requirements or non-citizen requirements.
  • You must be eligible for participation in federal programs.

In addition, the subject property must meet the following requirements.

  • It must be moderately-sized for the area.
  • The home cause can’t exceed the area’s applicable loan limit.
  • The home can’t be designed for the production of income.

How much can I borrow with a USDA Direct Mortgage?

Up to the maximum loan limit, the amount of money that an applicant’s eligible for depends on their ability to pay it back. When evaluating home loan applicants for Direct home loans, Rural Development considers income, assets, debt, and payment assistance. And remember, you can’t borrow more than the local USDA loan limit for the county where the home is located, no matter what your repayment ability may be.

What areas in AR are eligible for USDA Direct Loans?

The subject property must be in an approved rural area. You can search specific addresses in Arkansas for USDA eligibility here.

Are there other zero down mortgage options or low down payment mortgages in Arkansas?

Yes, other low down payment mortgage options, and no down payment mortgage options are available in Arkansas besides USDA Direct Loans. You can start by looking into USDA Guaranteed Loans in Arkansas, FHA Loan in Arkansas, or if you’re a veteran or qualified family member, VA Loans in Arkansas. You may also want to research if any helpful Arkansas down payment assistance programs may be available.

Search all USDA Guaranteed Loan Limits (Direct and Guaranteed Loans)
Learn about today’s USDA Loan Requirements

Direct Loans aren’t as popular as USDA Guaranteed Loans, which accommodate a wider range of borrower qualifications. The USDA sets specific maximum mortgage limits for Direct Loans in Arkansas. Search home loan limits for your area below.

Arkansas USDA Direct Loan Limits

Area
Direct Loan Limit
Arkansas $251,862
Ashley $251,862
Baxter $251,862
Benton $251,862
Boone $251,862
Bradley $251,862
Calhoun $251,862
Carroll $251,862
Chicot $251,862
Clark $251,862
Clay $251,862
Cleburne $251,862
Cleveland $251,862
Columbia $251,862
Conway $251,862
Craighead $251,862
Crawford $251,862
Crittenden $251,862
Cross $251,862
Dallas $251,862
Desha $251,862
Drew $251,862
Faulkner $251,862
Franklin $251,862
Fulton $251,862
Garland $251,862
Grant $251,862
Greene $251,862
Hempstead $251,862
Hot Spring $251,862
Howard $251,862
Independence $251,862
Izard $251,862
Jackson $251,862
Jefferson $251,862
Johnson $251,862
Lafayette $251,862
Lawrence $251,862
Lee $251,862
Lincoln $251,862
Little River $251,862
Logan $251,862
Lonoke $251,862
Madison $251,862
Marion $251,862
Miller $251,862
Mississippi $251,862
Monroe $251,862
Montgomery $251,862
Nevada $251,862
Newton $251,862
Ouachita $251,862
Perry $251,862
Phillips $251,862
Pike $251,862
Poinsett $251,862
Polk $251,862
Pope $251,862
Prairie $251,862
Pulaski $251,862
Randolph $251,862
Saline $251,862
Scott $251,862
Searcy $251,862
Sebastian $251,862
Sevier $251,862
Sharp $251,862
St. Francis $251,862
Stone $251,862
Union $251,862
Van Buren $251,862
Washington $251,862
White $251,862
Woodruff $251,862
Yell $251,862

More USDA Loan Resources

USDA Direct Loan Income Limits (Low Income)
USDA Direct Loan Limits (Low Income)

All USDA Loan Limits
All USDA Loan Income Limits
USDA Loan Requirements
USDA Loan Programs
USDA Loan Calculator

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Maximum Loan Amounts
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