FHA Mortgage: Arkansas

A Few Facts and Figures

In the year 2000, the census placed the number of homes in the state of Arkansas at 1,173,043. This represents a 17 percent increase from estimates ten years earlier in 1990. More than 600,000 of these homes are situated in the state's urban development areas, and another 600,000 are in its rural zones. Arkansas's home ownership rate is currently estimated at 69 percent.

The Federal Housing Administration (FHA) is a division of the United States Department of Housing & Urban Development, which is more commonly referred to as HUD. The FHA administers a whole range of single-family mortgage loan programs within the state of Arkansas. All these programs are administered with the assistance of a number of FHA-approved lending institutions or by a few approved Arkansas mortgage companies.

The FHA Mortgage: Arkansas Loan Program

The FHA mortgage: Arkansas program offers potential homebuyers a relatively inexpensive means of obtaining a mortgage loan. It is specially designed to enable first-time homebuyers and low-income families obtain mortgages that they may not otherwise qualify for.

While the FHA does not actually issue the mortgages, it insures the mortgages that are issued to these individuals and families. By so doing, it reduces the lenders risk, and increases the likelihood of the mortgage lender approving the loan. You may apply for an Arkansas FHA mortgage to purchase a one, two, three, or four-family home. One stipulation is that it must be your primary residence. The FHA loan limits vary from county to county, based on the median house prices.

You have the option of obtaining a Fixed Rate mortgage or the FHA's new hybrid adjustable rate mortgage (ARM). You may also obtain a home mortgage for a manufactured home if the home meets certain specific requirements such as the National Manufactured Home Construction and Safety Standards.

The Mortgage Loan Process

When you apply for an FHA Mortgage, Arkansas mortgage lenders are required to submit your loan application in advance so that the property in question can be appraised. In the meantime, your credit is checked and approval granted or denied. With approved credit and a satisfactory appraisal, the mortgage lender will fund your mortgage. The FHA will insure this mortgage against loss, in the event that you happen to default on the loan.

Arkansas 203(K) Rehabilitation Loan Program

The 203(K) rehabilitation loan program represents another one of the FHA-sponsored programs that have become popular in Arkansas. These loans are used as a primary source of funding for the repair and rehabilitation of homes with up to four units, and more than a year old.

Under this program, the mortgage is typically a combination loan that can be used to buy and rehabilitate a "fixer-upper" property. Alternatively, it may be used as a rehabilitation-only loan. Rather than paying out a lump sum to finance the construction, the loan proceeds are periodically advanced over the course of the rehabilitation period.

The 203(K) rehabilitation loan program has become a particularly important program for several Arkansas communities that are engaged in neighborhood revitalization programs. The program not only helps in improving neighborhoods but also in expanding the prospects of home ownership for thousands of individuals and families.

Several Arkansas residents have successfully taken advantage of the Section 203(K) FHA program in conjunction with various local and state housing agencies along with a number of nonprofit organizations dedicated to rehabilitating various Arkansas properties and neighborhoods.

FHA Lenders in Arkansas

You can use the official Department of Housing and Urban Development Lender Search Tool to find an FHA approved lender in your area. There are over 200 lenders approved for FHA mortgages in Arkansas, including:

• Allied Home Mortgages Capital Corporation
• Arkansas Federal Credit Union
• Bank of Little Rock Mortgage Corp
• Cornerstone Mortgage Center
• First Arkansas Financial
• Pulaski Mortgage
• Signature Bank of Arkansas

Be sure to check with individual lenders as to what programs theyoffer - not all lenders are approved for the 203(K) program.

The FHA mortgage program offers an invaluable opportunity for Arkansas mortgage lenders to demonstrate their continued commitment towards serving low-income and other underserved communities. It also helps brokers fulfill their responsibilities under the Community Reinvestment Act (CRA).