Arkansas FHA Loans –  Requirements and Loan Limits for 2024 – Arkansas FHA Lenders

arkansas fha lenders

Arkansas home buyers who need a small down payment or have poor credit scores may be able to purchase a home with an Arkansas FHA loan. A government backed FHA loan is often selected by first time home buyers due to the flexible loan requirements.

To obtain an FHA loan in Arkansas, borrowers generally need a minimum credit score of 580, a down payment as low as 3.5%, and a steady employment history. Meeting the debt-to-income ratio guidelines and obtaining an appraisal are essential steps in the process.

We will take you through the Arkansas FHA loan requirements, detail what is needed to qualify, then help you to get pre-qualified. If you already know that an FHA loan is right for you, then click to speak with a loan officer whether you live in Little Rock, Fort Smith, Fayetteville, Springdale, or anywhere else.

Arkansas FHA Loan Benefits

These are the benefits of an FHA loan versus a conventional loan:

  • Lower credit scores permitted
  • Lower down payment requirement
  • FHA interest rates are lower than conventional rates
  • Gift funds allowed
  • Seller closing cost contributions are allowed
  • FHA loans are assumable
  • Co-signers allowed
  • Higher debt to income ratios permitted

There are other benefits that are extremely helpful but are often not mentioned by others when discussing FHA loans. For example, we are able to secure a loan approval with gaps in your employment. If you have a recent Chapter 13 bankruptcy or are still making payments, we can still get you approved for an FHA loan. 

Unusual circumstances like this are possible with an FHA loan. If you believe you may not qualify or have been denied by another lender, then let us run though your situation because there is a good chance we can help.

Arkansas FHA Loan Requirements for 2024

These are the basic FHA loan eligibility requirements for this year. All of these must be met to be approved for an FHA loan. If you are not positive on whether you meet these standards or have questions, an FHA lender can help.

  • Down payment of 3.5% or 10% if your credit score is below 580
  • 2-year employment history with some exceptions allowed
  • Fully document your income for the past two years
  • Minimum FICO score requirement of 500 – down payment will vary
  • Mortgage Insurance Premium (MIP) is required for every FHA loan
  • Maximum debt to income ratio of 43% with exceptions up to 56%
  • The home must be your primary residence
  • No bankruptcies or foreclosures in the past two years

We recommend you speak with one of our loan officers before completing an application. The initial conversation can

Arkansas FHA Down Payment Requirements

The down payment requirements for an FHA loan is the same in every state. The minimum requirement for an FHA loan is 3.5% of the purchase price. However, if your credit score is below 580, then the down payment requirement will be 10%.

If you do not have the down payment needed, you can also use gift funds from a relative.

Arkansas FHA Down Payment Assistance

There are various down payment assistance programs in every state. Below is a list of just a few down payment assistance programs that may be available to you in Arkansas. Home buyers will need to contact, and arrange for these programs independently. We can accept the funds from these programs for your down payment.  but they will not arrange for the down payment assistance.

ADFA Down Payment Assistance

American Dream Down Payment Initiative

If your credit scores are at 620 or better, we can help you secure down payment assistance and link it to your loan approval. The assistance may or may not be forgivable. 

How To Apply For an FHA Loan in Arkansas Today

The application process is something that many homebuyers do not look forward to because of the amount of time it takes and the documents that one must provide. If you follow this process, it can make applying for an FHA loan easier and faster.

There are two important things to understand prior to beginning the application. First, the application must be fully completed. If you leave things out, you are delaying the process. Your loan officer cannot move forward without a fully completed loan application. Second, the required documents cannot be waived. If you are asked to provide documentation, then you must comply before the application can be submitted to underwriting.

You will be given a secure link to complete your loan application. This is the easiest and fastest way to apply and you can save your work and come back and finish it later. 

Next, you will be asked for various documents to be submitted electronically either via a secure upload or through email. The industry has gotten away from mailing paper documents. If you are planning to apply for an FHA loan, we suggest you begin collecting electronic copies of the following documents:

  • Last two years tax returns and W2s
  • Last 30 days pay stubs
  • Last two months of your bank statements
  • Any quarterly statements from investments, 401k’s, etc
  • If you are divorced, you may need your divorce decree

Something else you can do to save time is to find an FHA inspector and also find an insurance agent for your homeowner’s insurance. Shop for these now while you have time rather than wait until the last minute and feel rushed.

Arkansas FHA Loan Limits

Every county in the United States has specific maximum loan limits that are set for single family homes, as well as 2-4 unit properties. The limits are set based upon the average home sales value in that county. The base FHA loan limit for single family residences in Arkansas for most counties is $498,257.

The loan limit means it is the largest FHA loan amount you can get this year in Arkansas.  You can purchase a more expensive home but the difference between the purchase price and your loan amount will have to be covered by your down payment. 

Listed below are the Arkansas FHA loan limits for every county.

County Name Single Family 2 Units 3 Units 4 Units
ARKANSAS $498,257 $637,950 $771,125 $958,350
ASHLEY $498,257 $637,950 $771,125 $958,350
BAXTER $498,257 $637,950 $771,125 $958,350
BENTON $498,257 $637,950 $771,125 $958,350
BOONE $498,257 $637,950 $771,125 $958,350
BRADLEY $498,257 $637,950 $771,125 $958,350
CALHOUN $498,257 $637,950 $771,125 $958,350
CARROLL $498,257 $637,950 $771,125 $958,350
CHICOT $498,257 $637,950 $771,125 $958,350
CLARK $498,257 $637,950 $771,125 $958,350
CLAY $498,257 $637,950 $771,125 $958,350
CLEBURNE $498,257 $637,950 $771,125 $958,350
CLEVELAND $498,257 $637,950 $771,125 $958,350
COLUMBIA $498,257 $637,950 $771,125 $958,350
CONWAY $498,257 $637,950 $771,125 $958,350
CRAIGHEAD $498,257 $637,950 $771,125 $958,350
CRAWFORD $498,257 $637,950 $771,125 $958,350
CRITTENDEN $498,257 $637,950 $771,125 $958,350
CROSS $498,257 $637,950 $771,125 $958,350
DALLAS $498,257 $637,950 $771,125 $958,350
DESHA $498,257 $637,950 $771,125 $958,350
DREW $498,257 $637,950 $771,125 $958,350
FAULKNER $498,257 $637,950 $771,125 $958,350
FRANKLIN $498,257 $637,950 $771,125 $958,350
FULTON $498,257 $637,950 $771,125 $958,350
GARLAND $498,257 $637,950 $771,125 $958,350
GRANT $498,257 $637,950 $771,125 $958,350
GREENE $498,257 $637,950 $771,125 $958,350
HEMPSTEAD $498,257 $637,950 $771,125 $958,350
HOT SPRING $498,257 $637,950 $771,125 $958,350
HOWARD $498,257 $637,950 $771,125 $958,350
INDEPENDENCE $498,257 $637,950 $771,125 $958,350
IZARD $498,257 $637,950 $771,125 $958,350
JACKSON $498,257 $637,950 $771,125 $958,350
JEFFERSON $498,257 $637,950 $771,125 $958,350
JOHNSON $498,257 $637,950 $771,125 $958,350
LAFAYETTE $498,257 $637,950 $771,125 $958,350
LAWRENCE $498,257 $637,950 $771,125 $958,350
LEE $498,257 $637,950 $771,125 $958,350
LINCOLN $498,257 $637,950 $771,125 $958,350
LITTLE RIVER $498,257 $637,950 $771,125 $958,350
LOGAN $498,257 $637,950 $771,125 $958,350
LONOKE $498,257 $637,950 $771,125 $958,350
MADISON $498,257 $637,950 $771,125 $958,350
MARION $498,257 $637,950 $771,125 $958,350
MILLER $498,257 $637,950 $771,125 $958,350
MISSISSIPPI $498,257 $637,950 $771,125 $958,350
MONROE $498,257 $637,950 $771,125 $958,350
MONTGOMERY $498,257 $637,950 $771,125 $958,350
NEVADA $498,257 $637,950 $771,125 $958,350
NEWTON $498,257 $637,950 $771,125 $958,350
OUACHITA $498,257 $637,950 $771,125 $958,350
PERRY $498,257 $637,950 $771,125 $958,350
PHILLIPS $498,257 $637,950 $771,125 $958,350
PIKE $498,257 $637,950 $771,125 $958,350
POINSETT $498,257 $637,950 $771,125 $958,350
POLK $498,257 $637,950 $771,125 $958,350
POPE $498,257 $637,950 $771,125 $958,350
PRAIRIE $498,257 $637,950 $771,125 $958,350
PULASKI $498,257 $637,950 $771,125 $958,350
RANDOLPH $498,257 $637,950 $771,125 $958,350
SALINE $498,257 $637,950 $771,125 $958,350
SCOTT $498,257 $637,950 $771,125 $958,350
SEARCY $498,257 $637,950 $771,125 $958,350
SEBASTIAN $498,257 $637,950 $771,125 $958,350
SEVIER $498,257 $637,950 $771,125 $958,350
SHARP $498,257 $637,950 $771,125 $958,350
ST. FRANCIS $498,257 $637,950 $771,125 $958,350
STONE $498,257 $637,950 $771,125 $958,350
UNION $498,257 $637,950 $771,125 $958,350
VAN BUREN $498,257 $637,950 $771,125 $958,350
WASHINGTON $498,257 $637,950 $771,125 $958,350
WHITE $498,257 $637,950 $771,125 $958,350
WOODRUFF $498,257 $637,950 $771,125 $958,350
YELL $498,257 $637,950 $771,125 $958,350

arkansas fha loans

FHA Loan Interest Rates

Understanding the interest rates is important because they ultimately determine the total amount you pay each month and for the life of the loan. The interest rate on an FHA loan can fluctuate based on market conditions. However, it’s not solely dependent on the market; it’s also tied to your own financial situation.

All lenders review the borrower’s creditworthiness before setting an interest rate. We consider your credit score and overall credit history to get a picture of how reliable you are in repaying debts. This means that if you have a higher credit score, you’re seen as less risky to lend money to, and consequently, you will likely receive more favorable interest rates. On the other hand, if your credit score is lower, you will a higher interest rate due to perceived risk. This is industry standard.

Your interest rate can have a significant impact. For instance, a 0.5% difference in interest rates might seem small, but on a $200,000 loan paid off over 30 years, it could mean paying nearly $20,000 more when all is said and done. 

The interest rate also impacts your overall loan approval amount because a higher rate will drive up your debt to income ratio. Therefore the higher the interest rate, the less you can qualify for.

Complete this short form to speak with a loan officer to get a rate quote.

FHA 203k Loans in Arkansas

FHA 203k loans are a great program which will allow you to borrow the money needed to purchase the home plus additional funds needed to rehabilitate or remodel the home. This program is also available in your state and we work with lenders that help with your FHA 203k loan.

This program can help when the home you want to buy does not pass the FHA inspection. Rather than have the repairs made before closing, you can take care of that after closing and borrow the money needed for the cost of those repairs.

If you would like to fully understand how this program works, we suggest reading our article on FHA 203k loans.

FHA Streamline Refinance in Arkansas

The FHA streamline refinance program is available to existing homeowners with an FHA who would like to refinance for a lower rate while eliminating some of the refinance costs such as an appraisal. You may also get a discount on the mortgage insurance premium which is another advantage.

The mortgage you have now must be an FHA loan to use the streamline refinance. A great benefit of this program is there will be no appraisal and no income or employment check.

For more information, please read our article on the FHA streamline refinance.

Arkansas FHA Loan Pre-Approval Process

If you are looking for an FHA loan, there is an optimal process you should follow to get pre-approved

  1. The first step is to make sure you have the minimum down payment needed to qualify
  2. check your credit and try to cleanup anything that is pulling down your scores
  3. Get a copy of your tax returns for the past two years
  4. Get copies of your pay stubs for the past month
  5. Get copies of your last two months’ bank statements
  6. Speak to an FHA lender about your loan scenario

Speak to a lender early in the process because they can identify opportunities to help with your FHA approval. This should be done months before you start looking for a home. Read more about how to get pre-approved for an FHA loan.

What to Look for in an FHA Lender

We take a few things into consideration when looking at which lenders we work with. Some of these also may be, or should be very important to you as you continue shopping for an FHA loan.

A good FHA lender will:

  • Allow for credit scores as low as 500
  • Provide FHA 203k loans
  • Offer competitive rates and fees
  • Have a great processing and underwriting team
  • Work closely with you throughout the loan process
  • Communicate well and will provide you with updates along the way

Arkansas FHA Loan Calculator

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Frequently Asked FHA Questions

Can I get an FHA loan with a bankruptcy?
In general, you will need to wait two years before applying for an FHA loan after a bankruptcy. However, there are some exceptions which may allow you to apply sooner. Read our article on the bankruptcy waiting period.

Are all FHA lenders the same?
Not all lenders who offer FHA loans are the same. They all do not offer all of the FHA programs and their rates and fees may also vary. Most importantly, the individuals who help to process and underwrite your loan will have a huge impact on your FHA loan experience.

Can I use gift funds for an FHA loan?
FHA loans do allow for gift funds to cover your down payment as well as your closing costs. The gift funds must come from a relative or a close friend as approved by the lender. You will need to provide the lender with a gift letter that is signed by the donor.

Do I need an appraisal for an FHA loan?
The FHA does require an appraisal and inspection before your loan can be approved. The FHA inspection has clear guidelines on what needs to be repaired before your loan can close. They want to make sure home buyers are moving into a home that is safe and operational.

Can I get an FHA loan for an investment property?
FHA loans are for primary residences only and if your goal is to purchase an investment property, you cannot use FHA insured financing for that purchase. However, if you are currently living in a home that is financed with an FHA loan, you can move to a new home and keep the current home as an investment.

Are there any income limits for FHA loans?
FHA loans do not have income limits and in fact, you can make millions per year and still be eligible for an FHA loan. Read more about the FHA income requirements.

Arkansas FHA Loans