Mortgage in Arkansas
The home of Walmart (Bentonville) and the 42nd President of the United States, Bill Clinton, Arkansas has a vibrant economy and a rich history. It's home to approximately three million people and has plenty of natural attractions, such as hot springs, forests, and lakes. Its relative affordability makes it a popular destination for people seeking a better home for less money. As of 2020, Arkansas had the second cheapest median home price in the nation , at $128,000. There are plenty of places where that won't even buy a condo! Our Arkansas mortgage calculator makes it easy to see how much you'll spend on a home in this state.
If you're looking to move to Arkansas, whether for work or to explore the state's natural beauty, here's what you can expect when it comes time to finding a mortgage.
Arkansas Mortgage Calculator: Explore Your Options
There are three primary mortgage types that you can get from a bank or credit union.
- Arkansas conventional mortgage: Over 60% of mortgages are conventional loans. These mortgages require a minimum credit score of 620, a debt-to-income ratio typically below 43%, and 20% down. Due to the low cost of living in Arkansas, you'll likely have a mortgage below the conforming loan limit. That means Freddie Mac and Fannie Mae will back your loan, making it easier to obtain.
- Arkansas FHA mortgage: FHA mortgages are perfect for homebuyers in Arkansas. For borrowers with a 580+ credit score, they offer an opportunity to put as little as 3.5% down. For borrowers with a credit score that falls between 500 and 579, these loans allow for as little as 10% down. As we'll see, there are programs from the state of Arkansas that will help with down payments - enabling many homeowners to take advantage of one of these loans.
- Arkansas VA mortgage: Veterans can obtain one of the best loan programs in the nation. VA loans typically require a minimum credit score of 660, but they offer competitive interest rates, as little as 0% down, and require no private mortgage insurance. It's a fantastic way to buy a home in Arkansas.
You can check today's mortgage rates for the loan type you want in your state and use those as a reference for our Arkansas mortgage calculator.
First-Time Homebuyers in Arkansas
Through the ADFA ( Arkansas Development Finance Authority ), the state government and local governments offer three primary programs to help first-time homebuyers purchase a home in Arkansas. Here are the details of them:
Affordable Housing Program
For buyers in the Crawford County or Sebastian County area, the Affordable Housing Program offers a $4,000 grant to help with your closing costs and the down payment.
Eligibility Criteria: Recipients must meet the low-income guidelines, complete a homebuyer counseling class, and use Armstrong Bank for financing.
For people interested in living in Jonesboro, AR, the Jonesboro Homeownership program provides a grant to help with down payment and closing costs.
Eligibility Criteria: Buyers can only use this grant to buy a home within the Jonesboro city limits. The household must earn less than the income limits specified by the program. Applicants must also complete a homebuyer education course.
Offered directly by the ADFA, the mortgage credit certificate is a unique program. It lets homebuyers claim a tax credit of 50% of the yearly mortgage interest paid. Although the tax credit has the $2,000 limit, homeowners can also claim it for the loan's life.
Eligibility Criteria: This credit is available for all first-time homebuyers. You must want to make your primary residence in Arkansas, subject to a few conditions. The purchase price cannot exceed $270k. Additionally, the household income cannot exceed anywhere from $75,000 to $85,000 per year (depending on county). Finally, the home must be in a county in "chronic economic distress" as defined by the IRS.
Arkansas Mortgage Calculator: See How Much Further Your Money Will Go Here
Arkansas is a beautiful part of the country where home prices are among the most affordable in the nation. If you want to buy a home in this state, use our Arkansas mortgage calculator to see how much you'll save by moving here!