With so many loan options available to potential Arkansas homebuyers, it can be difficult to choose the best one for your financial situation. You can find mortgages advertising low down payments, fixed and adjustable rates, low or no mortgage insurance, and a number of other appealing features. You should consider your options and decide what is important to you and your family before making a decision. There is one mortgage program, however, that is a great option for almost all Arkansans: the RD Loan.
The RD Loan isn’t widely known because it only became available in the 1990s. The USDA wanted to create a loan program that would allow low- and moderate-incomed families the opportunity to afford housing in rural areas of the country. Rural land doesn’t just include farms and open country, though. The majority of the U.S. falls into a “rural” area—97%, in fact. Arkansas, being a land-rich state by nature, is largely rural which is great for potential homebuyers because the RD Loan is only valid on homes in designated rural areas. The USDA has a search engine on its website that will determine whether or not your desired home is in an eligible area.
Arkansas stands to gain from the RD Loan because assisting families with purchasing a home in rural areas helps strengthen and grow our state’s economy. Rural communities often suffer from high taxes, few job opportunities, and depleting populations. Many factories have closed or relocated and, as a result, families can no longer afford to live in rural communities. The RD Loan requires no down payment for homes in eligible areas, so families are incentivized to relocate or remain in rural communities with no obligation for money out of pocket. The RD Loan is especially appealing to first-time homebuyers who usually don’t have a large savings to put toward the purchase of a home. Any savings they do have would be better spent on housing expenses once they’ve secured a loan.
Arkansas’ per capita income is less than the national average which is beneficial to anyone who is interested in the RD Loan because their income is more likely to qualify. The RD Loan is targeted toward low- to moderate-income households, so even if your income is moderate by Arkansas standards, it may fall within the RD Loan’s guidelines. The number of people in your household is taken into consideration when evaluating income qualifications. The RD Loan also allows additional co-borrowers on the loan, so if you have multiple working members in your household, they may be used for additional income.
Among all the appealing mortgage loan options on the market, the RD Loan is a great option for Arkansans. It helps families to secure affordable housing and promotes the growth of our economy at the same time. Rural communities will thrive with growing populations, adding countless jobs to our state and families will be secure in homes they will live in for many years.