Arkansas Rural Development Loans: Not Just for Farmers


Arkansas Rural Development Eligible Areas MapIt’s common for people to think that the Rural Development Home Loans are only for farmers or for people who live out in the middle of nowhere. This is understandable as this program does come from the US Department of Agriculture and does include “rural” in the title… However, this is not all correct.

So what is the USDA Rural Development Home Loan?

A USDA loan is a home loan that is offered by the U.S. Department of Agriculture. It helps qualified people purchase, refinance, renovate or relocate a house. There are two types of USDA loans: direct and guaranteed. The Direct loan is provided by the USDA, while the latter comes from a third party, such a mortgage lender or bank.

  • Direct: These loans are generally meant to help low-income individuals buy homes in rural areas. The maximum loan term is 33 years, or 38 years for applicants whose incomes fall below 60 percent of the area median income (AMI).
  • Guaranteed: A guaranteed USDA loan is also for low-income individuals who need help buying homes in rural areas, but the loan term is only 30 years.

The Guaranteed program is for low to moderate income applicants to purchase a primary residence in a “rural” area of the state. These mortgages are processed, underwritten and serviced by your preferred lender and it has “guarantees” backed by the USDA.

To qualify for this loan type you have to meet the income guidelines set forth in the programs terms. To find out if your income is eligible  use the USDA’s Housing Income Eligibility Calculator.

So what exactly is considered “rural” anyway?

Rural areas consist of communities that have 20,000 and under in population and are not a part of an urban area. As the guidelines for what is and what isn’t considered “rural” change often, it’s best to either call your mortgage specialist, or view the map. In Arkansas, there are several counties that are eligible for the loan assistance program. View the map on the USDA rural development webpage to see which counties are currently eligible or ineligible for a Rural Development Loan.

What are the Benefits of a USDA Loan?


  • Moderate income limits apply – based on family size
  • No down payment required.
  • No Prepayment Penalties.
  • Purchase: 2% upfront fee that can be rolled into the loan
  • Refinance: 2% upfront fee that can be rolled into the loan
  • A one-time guarantee fee is paid at closing. In some cases, this fee, closing
    costs and repairs may be included in the loan.
  • Competitive 30 year fixed interest rates.
  • No maximum loan amount.
  • No limits on cash contributions.
  • Not restricted to first time home buyers
  • Home must be occupied as your permanent residence.

Finding Eligible Properties in Arkansas

The US Department of Agricultures Rural Development website has a handy map that shows you which counties are eligible and which are currently not per state for the loan program. You can also use the search feature on the USDA website, here.

However, be aware that sometimes glitches in entering in the correct address will deem a property ineligible when it is in fact eligible for the assistance. This is why it is just better to call us or your mortgage lender and not waste the time trying to maneuver the website.

Note that the ineligible counties can become eligible again when the next review takes place, some counties will become eligible and others will move into the ineligible territory. So if you don’t see the spot you are looking for, don’t forget to check back.

If you are curious about whether or not a home or land purchase you are looking at would qualify for this type of loan, Contact Us. 


Steve Atwell, Buyer’s Agent for Northwest Arkansas

Email:  Steve Atwell

Phone: 1-866-809-7059  |  Cell: 479-685-3363 | Fax: 1-800-479-1503

 Buyers First Realty
100 E Mountain St
Sulphur Springs , AR 72768