For inquiries concerning the direct programs and application requests in Arkansas, please click on the CONTACTS tab to obtain the contact information for the office that services the county in which you wish to apply.
Program Status: Open
Program Factsheet: PDF
What does this program do?
Also known as the Section 502 Direct Loan Program, this program assists low- and very-low-income applicants obtain decent, safe and sanitary housing in eligible rural areas by providing payment assistance to increase an applicant’s repayment ability. Payment assistance is a type of subsidy that reduces the mortgage payment for a short time. The amount of assistance is determined by the adjusted family income.
Who may apply for this program?
A number of factors are considered when determining an applicant’s eligibility for Single Family Direct Home Loans. At a minimum, applicants interested in obtaining a direct loan must have an adjusted income that is at or below the applicable low-income limit for the area where they wish to buy a house and they must demonstrate a willingness and ability to repay debt.
- Be without decent, safe and sanitary housing
- Be unable to obtain a loan from other resources on terms and conditions that can reasonably be expected to meet
- Agree to occupy the property as your primary residence
- Have the legal capacity to incur a loan obligation
- Meet citizenship or eligible noncitizen requirements
- Not be suspended or debarred from participation in federal programs
Properties financed with direct loan funds must:
- Generally be 2,000 square feet or less
- Not have market value in excess of the applicable area loan limit
- Not have in-ground swimming pools
- Not be designed for income producing activities
Borrowers are required to repay all or a portion of the payment subsidy received over the life of the loan when the title to the property transfers or the borrower is no longer living in the dwelling.
Applicants must meet income eligibility for a direct loan. Please select your state from the dropdown menu above.
What is an eligible area?
Generally, rural areas with a population less than 35,000 are eligible. Visit the USDA Income and Property Eligibility website for complete details.
How may funds be used?
Loan funds may be used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.
How much may I borrow?
Using the Single Family Housing Direct Eligibility Assessment tool, potential applicants may enter information online to determine if the Section 502 Direct Loan Program is a good fit for them prior to applying. The tool will provide a preliminary eligibility determination after a potential applicant enters information on their general household composition, monthly income, monthly debts, property location, estimated property taxes, and estimated hazard insurance. Potential applicants are welcome to submit a complete application for an official determination by USDA Rural Development (RD) regardless of the eligibility assessment results. Upon receipt of a complete application, RD will determine the applicant’s eligibility using verified information and the applicant’s maximum loan amount based on their repayment ability and the area loan limit for the county in which the property is located.
What is the interest rate and payback period?
- Fixed interest rate based on current market rates at loan approval or loan closing, whichever is lower
- Interest rate when modified by payment assistance, can be as low as 1%
- Up to 33 year payback period - 38 year payback period for very low income applicants who can’t afford the 33 year loan term
How much down payment is required?
No down payment is typically required. Applicants with assets higher than the asset limits may be required to use a portion of those assets.
Is there a deadline to apply?
Applications for this program are accepted through your local RD office year round.
How long does an application take?
Processing times vary depending on funding availability and program demand in the area in which an applicant is interested in buying and completeness of the application package.
What governs this program?
- The Housing Act of 1949 as amended, 7 CFR, Part 3550,
- HB-1-3550 - Direct Single Family Housing Loans Field Office Handbook
Why does USDA Rural Development do this?
USDA Rural Development’s Section 502 Direct Loan Program provides a path to homeownership for low- and very-low-income families living in rural areas, and families who truly have no other way to make affordable homeownership a reality. Providing these affordable homeownership opportunities promotes prosperity, which in turn creates thriving communities and improves the quality of life in rural areas.
NOTE: Because citations and other information may be subject to change please always consult the program instructions listed in the section above titled "What Law Governs this Program?" You may also contact your local office for assistance.
Forms & Resources
• Form RD 3550-23, Applicant Orientation Guide - English version
• Form RD 3550-23, Applicant Orientation Guide - Spanish version
• Rural Development State Office Contact Information
Training Webinars and Handouts:
• Program overview and handout
• Pre-qualification and application processes and handout
• Determining annual, adjusted, and repayment income and handout
• Worksheet for computing income & max loan amount calculator
• June 13, 2018 version of the worksheet
• Credit requirements and handout
• eForms electronic application process, handout, and user guide
Effective November 1, 2018, the current interest rate for Single Family Housing Direct Home Loans is 3.50% for low and very low income borrowers.
For information and applications on Single Family Housing direct loans and grants please contact the appropriate field office that serve your county:
1. For Boone, Newton, Searcy, Marion, Carroll, Benton, Washington, Madison, Izard, Baxter, Fulton, and Stone counties, call 870.741.8600, Extension 4
• Mailing Address: 402 N Walnut Rm 201, Harrison AR 72601
• Fax E-Mail Address: Ra.firstname.lastname@example.org
2. For Craighead, Mississippi, Poinsett, Independence, Cleburne, Jackson, Sharp, Lawrence, Clay, Greene, and Randolph counties, call 870.972.4671, Extension 4
• Mailing Address: 3407 S Caraway Ste 4, Jonesboro AR 72404
• Fax E-Mail Address: Ra.email@example.com
3. For St. Francis, Arkansas, Crittenden, Lee, Cross, Monroe, Phillips, White, Lonoke, Pulaski, Prairie, and Woodruff counties, call 870.633.3055 Extension 4
• Mailing Address: 4401 N Washington, Forrest City AR 72335
• Fax E-Mail Address: Ra.firstname.lastname@example.org
4. For Drew, Bradley, Chicot, Desha, and Ashley counties, call 870.367.8400 Extension 4
• Mailing Address: 419 W Gaines, Monticello AR 71655
• Fax E-Mail Address: Ra.email@example.com
5. For Jefferson, Cleveland, Lincoln, Grant, Calhoun, Columbia, Dallas, Union, Ouachita counties, call 870.534.3200 Extension 4
• Mailing Address: 100 E 8th Ave, Rm 2603, Pine Bluff AR 71601
• Fax E-Mail Address: Ra.firstname.lastname@example.org
6. For Hempstead, Miller, Lafayette, Little River, Howard, Pike, Sevier, Polk, Nevada, Hot Spring, Garland, Saline, Clark, and Montgomery counties, call 870.777.8800 Extension 4
• Mailing Address: P. O. Box 768, Hope AR 71802
• Fax E-Mail Address: Ra.email@example.com
7. For Sebastian, Crawford, Franklin, Logan, Scott, Pope, Johnson, Yell, Faulkner, Conway, Perry, and Van Buren counties, call 479.968.3497, Extension 4.
• Mailing Address: 420 N Hampton Street, Russellville AR 72802
• Fax E-Mail Address: Ra.firstname.lastname@example.org