USDA Section 502 Guaranteed Loan Program (Arkansas)

What is USDA Section 502 Guaranteed Loan Program (Arkansas)?

USDA Section 502 Guaranteed Loan Program (Arkansas) is a first mortgage for homebuyers in Statewide, Arkansas, administered by USDA Rural Development - Rural Housing Service.

• The Section 502 Guaranteed Loan Program helps approved lenders provide low- and moderate-income households 100% financing (no money down) to buy, build, rehabilitate, improve, or relocate a primary residence in eligible rural areas of Arkansas. USDA provides a 90% loan note guarantee to reduce lender risk. Loans are 30-year fixed-rate with no credit score minimum; income may not exceed 115% of area median income.
• 100% financing - no down payment.
• 30-year fixed rate.
• No minimum credit score.
• Manufactured, modular, condo, and PUD eligible.
• Closing costs may be financed.
• This is a federal program, so it is available beyond a single state or city.
• Funding comes from USDA Rural Development loan guarantee (Housing Act of 1949, Section 502(h); 7 CFR Part 3555).

How much assistance does it provide?

USDA Section 502 Guaranteed Loan Program (Arkansas) provides assistance worth 100% of the purchase price, as set by the program.

• Buyer contribution: No down payment required (100% financing) for those who qualify.
• Amounts are the program's published maximums, not an offer — USDA Rural Development - Rural Housing Service determines any individual award.

Do you have to pay it back?

USDA Section 502 Guaranteed Loan Program (Arkansas) is a first mortgage and is repaid under the terms set by USDA Rural Development - Rural Housing Service.

• Repayment is triggered by Standard mortgage repayment; no DPA recapture.
• The assistance is recorded in First position.
• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

USDA Section 502 Guaranteed Loan Program (Arkansas) is open to buyers who will live in the home as their primary residence.

What are the income limits?

USDA Section 502 Guaranteed Loan Program (Arkansas) limits household income to 115% of the area median income, which varies by county and household size.

• Adjusted household income may not exceed 115% of area median income; county-specific - verify on the USDA income eligibility site.
• The limit applies to total household income, not only the borrower’s.
• Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

USDA Section 502 Guaranteed Loan Program (Arkansas) can be used for Single Family, Condo, Townhouse, and Manufactured.

• New construction is eligible.
• Manufactured homes are eligible.

Where does it apply?

USDA Section 502 Guaranteed Loan Program (Arkansas) is a federal program, so it is not limited to Arkansas.

• The program targets specific areas: Property must be located in a USDA-designated eligible rural area (verify via the USDA Eligibility site).

How do you apply?

Applications for USDA Section 502 Guaranteed Loan Program (Arkansas) go through USDA Rural Development - Rural Housing Service, which publishes the current terms and the application steps on its own site.

1. 1

   Contact USDA Rural Development - Rural Housing Service to reserve funds

   Funds are reserved through Applications accepted year-round through USDA-approved lenders, and are subject to availability.

2. 2

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.