Arkansas VA buyers: tax-free military retirement pay and a homestead that can owe no state tax
We show how Arkansas’s military retirement exemption, its 100% total and permanent disabled veteran homestead exemption, the homestead credit, and the transfer tax change the numbers on a VA loan near Little Rock AFB, Camp Robinson, Fort Chaffee, and Pine Bluff.
Arkansas does not tax military retirement pay, and a veteran rated 100% total and permanent is exempt from state taxes on the homestead, so a military retiree’s Arkansas VA file often has more residual income than the same file one state over.
An Arkansas VA loan is a VA-guaranteed home loan that lets an eligible veteran, service member, or surviving spouse buy with $0 down when full entitlement is available, with no monthly mortgage insurance and no VA minimum credit score. It fits the C-130 crew member at Little Rock AFB, the Guard soldier at Camp Robinson or Fort Chaffee, the Pine Bluff Arsenal worker who served, and the military retiree moving home to Arkansas. The JD.Mortgage Team at PRMG is a no-overlay Arkansas VA lender. We follow VA rules, not extra bank rules, and we work the files other lenders turned away. 25+ years, 3,100+ closed loans, Scotsman Guide Top Originator 2026. Lending in 49 states. New York excluded.
Last updated: October 6, 2026
Guidance reference: VA Pamphlet 26-7, Ch. 2 and 6 (VA updated July 9, 2026); Ch. 4 (VA updated August 26, 2026); Ch. 10 (VA updated August 6, 2026); VA Circular 26-19-22 (August 8, 2019); Ginnie Mae MBS Guide, Ch. 24 (effective September 14, 2026)
Arkansas VA Loans: The Short Answer
A Arkansas VA loan is a VA-guaranteed mortgage with no down payment on full entitlement, no monthly mortgage insurance, and no VA minimum credit score. The files that get stuck are usually stuck on lender rules, not VA rules. We underwrite to VA’s rules.
As of Q3 2026 (September 2026): VA sets no minimum credit score (VA Pamphlet 26-7, Ch. 4; 38 CFR 36.4340). VA uses 41% as a check point, not a limit, for how much of your monthly income goes to debt payments (your debt-to-income ratio). Above 41%, we take a closer look at your file. That closer look is not needed if the money left over each month after your bills (VA calls this residual income) is at least 20% above VA’s chart. If it is not, your loan can still be approved when a supervisor signs a note that lists the strengths in your file. For a family of four in the South on a loan of $80,000 or more, the chart is $1,003 a month (VA Pamphlet 26-7, Ch. 4). With full entitlement (your full VA home loan benefit), there is no VA loan limit. With partial entitlement, the county limit applies. The 2026 county loan limit is $832,750 in every Arkansas county (VA.gov loan limits; FHFA 2026 limits). The funding fee (a one-time VA fee) is 2.15% on a first-use purchase with less than 5% down. It is 3.3% on later use with less than 5% down, and 0.5% on an IRRRL (VA’s refinance to lower your rate). It is waived if you get VA disability compensation (VA.gov funding fee table, effective April 7, 2023).
What Is a Arkansas VA Loan?
A Arkansas VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs and made by a private lender. Because VA guarantees part of the loan, the lender can approve it with no down payment on full entitlement and no monthly mortgage insurance. It is the same federal program in every state. What changes in Arkansas are the state’s tax rules, its insurance market, its county loan limits, and how closings work here, which is what the rest of this page covers.
Arkansas VA Loan Rules and Veteran Tax Benefits
Arkansas stacks three veteran and homeowner benefits. Here is what each one does, and what it does not do.
| Arkansas benefit | Who | What it does |
|---|---|---|
| Disabled veteran homestead exemption | Veterans with a service-connected 100% total and permanent disability, or special monthly compensation for limb loss or total blindness | Exempt from all state taxes on the homestead and personal property |
| Homestead property tax credit | Owners of a principal residence | Up to $500 a year; up to $600 authorized starting with 2026 tax bills |
| Military retirement exemption | Military retirees | Retirement pay exempt from Arkansas income tax since January 1, 2018 |
The disabled veteran exemption. The Arkansas Department of Veterans Affairs state benefits page says a veteran with service-connected one hundred percent (100%) total and permanent disability, or special monthly compensation for limb loss or total blindness, is exempt from all state taxes on the homestead and personal property the veteran owns. The law is Arkansas Code 26-3-306 and following sections.
Surviving spouse rule. Surviving spouses keep the exemption as long as they remain unmarried. Dependent children keep it during their minority. In every case, the VA must re-certify continued entitlement each year. Keep your benefit letter current and on file with the county.
How to apply. ADVA points veterans to their County Veteran Service Officer for help. The home must be your homestead, so file after closing once you live there. The DFA Assessment Coordination Division also lists the homestead credit, which you claim with your county.
Here is where the state rule and the loan rule split. Any discharge or service standard Arkansas uses for this exemption is an Arkansas rule for the tax benefit only. VA home loan eligibility is a federal decision. VA looks for service under conditions other than dishonorable and issues a Certificate of Eligibility. See our VA loans FAQ.
Why it matters to your approval. We qualify you on the full payment with the tax escrow. A lower tax line gives more room in debt-to-income. Tax-free retirement pay also means a smaller state tax deduction when we figure residual income. A veteran receiving VA disability compensation is generally exempt from the VA funding fee as well.
Why Arkansas VA Files Land Here
A Arkansas VA file usually comes to us after a no somewhere else. Most of the time the no came from a lender rule, not VA. We underwrite to VA Pamphlet 26-7 and 38 CFR only, and we manually underwrite files the software will not approve.
The wait before you can refinance is a VA rule too. It covers a VA IRRRL (a refinance to a lower rate) and a VA cash-out that pays off a VA loan. VA loans are also sold into bonds backed by Ginnie Mae. For loans in those bonds, Ginnie Mae adds its own wait (Ginnie Mae MBS Guide, Ch. 24). We flag these early so they never surprise you at closing.
Read what no-overlay lending covers and what it does not.
Not sure how Arkansas’s veteran tax rules change your payment? We run the numbers with your real tax line before you make an offer.
Run My NumbersThe VA Funding Fee in Arkansas: 2026 Table
Every Arkansas VA purchase carries a funding fee unless you are exempt. It is set by VA, not by us, and it is the same in every state.
| Loan type | Fee |
|---|---|
| First use, less than 5% down | 2.15% |
| First use, 5% to 9.99% down | 1.5% |
| First use, 10% or more down | 1.25% |
| After first use, less than 5% down | 3.3% |
| Cash-out refinance (first / later use) | 2.15% / 3.3% |
| IRRRL (streamline refinance) | 0.5% |
| Veteran receiving VA disability compensation | $0 (exempt) |
Source: VA.gov funding fee table, effective April 7, 2023. More on exemptions and refunds: VA funding fee guide. We do not publish rates on this page because rates change daily.
Seller Concessions: The 4% Rule Most People Get Wrong
VA separates two buckets. The seller can pay your normal closing costs with no cap. Separately, the seller can give concessions up to 4% of the reasonable value, and those concessions can pay off your debts, prepay taxes and insurance, or cover the funding fee (VA Pamphlet 26-7, Ch. 8).
On a Arkansas contract, that difference matters. Paying off a car note at closing can lower your debt-to-income ratio and raise your residual income at the same time. The full 4% breakdown.
Where Arkansas VA Buyers Live: Jacksonville, Central Arkansas, and the River Valley
Little Rock AFB, Jacksonville, and Cabot
Little Rock AFB sits in Jacksonville in Pulaski County. Most airmen buy in Jacksonville, Sherwood, or north up Highway 67/167 in Cabot and Austin in Lonoke County. Cabot draws families for newer homes and short commutes to the base gate. Ward and Beebe offer more land for the money. Tours at the base can run several years, so many families buy instead of renting, then keep the home as a rental when they leave.
Camp Robinson and North Little Rock
Camp Robinson is the Arkansas National Guard’s main post in North Little Rock. Many Guard members hold full-time technician or civilian jobs nearby. They buy in North Little Rock, Maumelle, Sherwood, and west Little Rock. Older neighborhoods close to the post bring VA property questions about roofs, paint, and systems.
Fort Chaffee and Fort Smith
Fort Chaffee sits in Sebastian County near Barling and Fort Smith. It is a Guard training post, so buyers are often Guard members, retirees, and civilians who served. Homes in Fort Smith, Barling, Greenwood, and Van Buren in Crawford County are priced well below most metro areas.
Pine Bluff Arsenal
The arsenal is in Jefferson County near White Hall. Civilian workers who served buy in White Hall, Redfield, and Pine Bluff. Many homes are older and rural, so wells, septic, and manufactured homes come up.
Northwest Arkansas retirees
Bentonville, Rogers, and Bella Vista in Benton County draw retirees who want amenities without a big-city price. Many Bella Vista homes carry HOA dues that we fold into the payment. Retirees often pay cash from a prior sale for part of the price, and a VA loan with a down payment still carries no monthly mortgage insurance.
Loan limit: every Arkansas county uses the $832,750 2026 one-unit baseline (FHFA 2026 limits). With full entitlement VA has no loan limit.
From Application to Keys in Arkansas
Apply
A short online start with no SSN and no credit pull to begin. We request your COE.
Build the approval
We map income, entitlement, and residual income. If the file needs a manual review, we structure it instead of declining it.
Write the offer
Your pre-approval has already been reviewed, and the seller-concession request goes into the contract.
Appraisal
We order the appraisal in VA’s online system. In most cases, VA then picks the appraiser from its own list. If the value may come in low, the Tidewater step gives two business days to send in recent sales first. How the VA appraisal works.
Close
Sign, fund, and move in. VA expects you to occupy within a reasonable time, usually 60 days.
Who Qualifies for a Arkansas VA Loan
| Requirement | What it means |
|---|---|
| Service | Qualifying active duty, veteran, National Guard or Reserve service, or an eligible surviving spouse. Exact time-in-service rules: VA.gov eligibility. |
| Discharge | Not dishonorable, for most Veterans. If you qualify only through 6 years in the Guard or Reserve, it must be honorable. These are VA rules, not state tax rules. |
| Certificate of Eligibility | Proves your entitlement. We request it for you in most cases. |
| Occupancy | You plan to live in the home, usually within 60 days of closing. A spouse can satisfy occupancy during a deployment. |
| Credit | No VA minimum score. Past events are reviewed in context. |
| Income | Stable and likely to continue. VA also checks residual income against the regional table. |
The Arkansas Money Risks VA Buyers Should Price In
The transfer tax on the deed
Arkansas charges a real property transfer tax of $3.30 per $1,000 of consideration (DFA transfer tax page). Example: a $275,000 purchase carries $907.50. Your contract says who pays it. If it lands on you, a seller can help through VA seller concessions.
Assessment caps and what happens at sale
The DFA property tax relief page describes Amendment 79, which caps yearly assessment growth at 5% on a homestead and 10% on other property. The cap protects owners who stay. When a home sells, the new owner’s value is set fresh. So the seller’s tax bill is not a safe guide to yours. We estimate your tax on the price you pay, not on what the seller paid.
The recertification risk
The disabled veteran exemption depends on the VA re-certifying your entitlement each year (ADVA). If the paperwork lapses, the county can bill the full tax, and your escrow shortage shows up on your statement. Keep your benefit letter current, and read every escrow statement your servicer sends.
Hail, wind, and tornadoes
Central Arkansas sees severe spring storms. Roof age drives insurance cost and appraisal questions. A roof near the end of its life can raise the premium or lead to a repair call before closing. Ask for the roof age before you write the offer. In a mapped flood zone along the Arkansas River or the White River, federal rules also require flood insurance on a VA loan, and that premium goes into your escrow.
Arkansas Property Types and VA Minimum Property Requirements
Arkansas homes outside the metros tend to sit on land. That is fine for a VA loan when the home meets the VA minimum property requirements.
Acreage, wells, and septic
Around Ward, Beebe, Greenwood, and Redfield, homes on a few acres with a well and septic are normal. VA can finance the home and a reasonable lot when the appraiser supports the land value with nearby sales. Safe water is required. Land that earns farm or timber income needs a plain talk before you sign.
Manufactured homes
Manufactured homes can work when they sit on a permanent foundation, are titled as real estate, and meet VA rules. We check the title and foundation first, before you pay for an appraisal. Older single-wide homes rarely qualify.
Older homes near Camp Robinson and Pine Bluff
Homes built before 1978 may show peeling paint, which VA wants fixed. Older wiring, roofs, and HVAC get a close look. Our VA appraisal guide covers how repairs get handled.
Bella Vista and HOA communities
HOA dues count in your payment and in your debt-to-income ratio. Condos must be in a VA-approved project. Already own in Arkansas and want cash without losing a low rate? See the Arkansas HELOC.
Common Arkansas VA Scenarios We Structure
Military retiree moving home to Cabot
Example: a retired master sergeant draws retired pay and a 60% VA disability award and buys a $310,000 home in Cabot. The funding fee is generally waived because of the disability compensation. Arkansas does not tax military retirement pay, so the state tax we subtract in the residual income math is lower. That leaves more room than the same file in a state that taxes retired pay. We count the retired pay and the disability award as stable income once we see the award letters.
100% total and permanent veteran in Sherwood
Example: the veteran closes with $0 down, then files the exemption with the county. The first escrow may carry the tax until the exemption posts. After that, the escrow review drops the tax line. We remind the veteran to keep the yearly VA recertification current.
Guard technician at Camp Robinson
Example: a full-time Guard technician earns a civilian salary and drills. We count both with history. If the ratio runs high, strong residual income and manual underwriting can carry the file. Technician pay is steady federal pay, so it is often the strongest income on the application.
Airman keeping a Jacksonville home
Example: an airman kept a $200,000 VA loan and PCSes back to Little Rock AFB later. The county limit is $832,750, so 25% is $208,187.50. Minus $50,000 in use leaves $158,187.50. Times four, that supports up to $632,750 with $0 down. Most Jacksonville and Cabot homes sit well under that.
Have orders, a rating letter, or a file another lender turned down in Arkansas? Send it. We tell you what VA’s rules actually allow.
Ask Us to ReviewHow a VA Loan Compares in Arkansas
| Feature | VA | Conventional | FHA |
|---|---|---|---|
| Down payment | $0 with full entitlement | 3% to 20% | 3.5% at 580+ |
| Monthly mortgage insurance | None | PMI under 20% down | Annual MIP |
| Minimum credit score | None set by VA | None on DU; 620 manual | 500 with 10% down; 580 with 3.5% |
| Upfront fee | Funding fee (waived with disability compensation) | None | Upfront MIP |
| Debt-to-income | 41% benchmark plus residual income | Up to 50% on DU | Set by automated or manual rules |
Sources: Fannie Mae Selling Guide B3-5.1-01; HUD Handbook 4000.1; VA Pamphlet 26-7. For most eligible Arkansas buyers, VA wins on payment. The exceptions are covered in the FAQ below.
Arkansas VA Loan Myths, Corrected
❌ Myth: “Once I get the Arkansas disabled veteran exemption, I never have to do anything again.”
✅ Fact: The Arkansas Department of Veterans Affairs says the VA must re-certify continued entitlement every year. If that lapses, the county can bill the full tax, and your escrow can come up short.
❌ Myth: “Arkansas taxes my military retirement, so my VA approval will be tighter here.”
✅ Fact: Arkansas military retirement pay has been exempt from state income tax since January 1, 2018, under Act 141. Less state tax means more residual income on a VA loan, not less.
❌ Myth: “My debt-to-income is over 41%, so I am out.”
✅ Fact: 41% is a check point, not a limit. Above it, your file gets a closer look. That step is skipped if your money left over each month is at least 20% above VA’s chart. If not, a supervisor can still approve the loan with a signed note listing your strengths.
❌ Myth: “There is a VA loan limit in my county.”
✅ Fact: With full entitlement there is no VA limit. The county limit only matters with partial entitlement.
Arkansas VA Loan Frequently Asked Questions
Do 100% disabled veterans pay property tax in Arkansas?
No, not state taxes on the homestead. Arkansas exempts veterans with a service-connected 100% total and permanent disability, or special monthly compensation for limb loss or total blindness, from all state taxes on the homestead and personal property. The VA must re-certify entitlement every year.
Does the Arkansas disabled veteran exemption pass to a surviving spouse?
Yes, while the spouse remains unmarried. The Arkansas Department of Veterans Affairs says surviving spouses keep the exemption as long as they do not remarry, and dependent children keep it during their minority. Annual VA re-certification is still required, so keep the paperwork current with the county.
Is military retirement pay taxed in Arkansas?
No. Arkansas military retirement pay has been exempt from state income tax since January 1, 2018, under Act 141 of the 91st General Assembly. For a VA loan, less state tax means more residual income in the math we use to qualify you.
What is the Arkansas homestead credit?
It is a property tax credit of up to $500 a year on a principal residence, and the legislature authorized up to $600 starting with 2026 tax bills. You claim it with your county once the home is your residence. It lowers the tax part of your monthly payment.
Who pays the transfer tax in Arkansas?
The contract decides. Arkansas charges $3.30 per $1,000 of consideration on a real property transfer, so a $275,000 purchase carries $907.50. If the buyer pays it, a seller can help cover it through VA seller concessions written into the contract.
What is the VA loan limit in Arkansas for 2026?
With full entitlement, there is no VA loan limit in Arkansas. Every county uses the $832,750 2026 one-unit limit, which matters only if part of your entitlement is still tied to another VA loan. Then it sets how much you can borrow with $0 down.
Can I get a VA loan near Little Rock AFB with a low credit score?
Often, yes. VA sets no minimum credit score, and we do not add one. We look at the last 12 months of payments, your debt-to-income ratio, and residual income. If the automated system says no, we can manually underwrite to VA rules.
Can Arkansas National Guard members get a VA loan?
Yes. Guard members become eligible through qualifying service, such as six years in the Selected Reserve or qualifying active duty time. We pull your Certificate of Eligibility to confirm. Drill pay can count with your civilian income when you have the history.
What credit score do I need for a VA loan in Arkansas?
VA does not set a minimum credit score. Many lenders add their own floor, often 620. We lend to VA’s rules without adding one, so a Arkansas file is judged on residual income, payment history, and the full picture.
Is there a VA loan limit in Arkansas?
With full entitlement there is no VA loan limit. The county conforming limit only applies when part of your entitlement is still tied to another VA loan. Then it sets how much VA will guarantee and whether a down payment is needed.
Can the seller pay my closing costs on a VA loan?
Yes. The seller can pay your normal closing costs with no cap, plus concessions of up to 4% of the reasonable value. Concessions can pay off debts, cover the funding fee, or prepay taxes and insurance.
Who is exempt from the VA funding fee?
Veterans receiving VA disability compensation are exempt, along with some surviving spouses and Purple Heart recipients on active duty. If a rating is granted after closing, the fee may be refunded.
Can I get a VA loan with a high debt-to-income ratio?
Yes. VA uses 41% as a check point, not a ceiling. Above it, we look closer unless the money left over each month is at least 20% above VA’s chart. If it is not, a supervisor can still approve the loan with a signed note listing your strengths. We close files above 41% when the money left over supports them.
Related Arkansas Resources
About the Author
J.D. Peck is an Area Manager and Mortgage Loan Originator (NMLS #314883) with the JD.Mortgage Team at Paramount Residential Mortgage Group, Inc. (NMLS #75243), based in Colorado Springs. 25+ years, 3,100+ closed loans, Scotsman Guide Top Originator 2026. Lending in 49 states. New York excluded.
Last updated: September 24, 2026. VA loan rules sourced from VA Pamphlet 26-7, 38 CFR, VA.gov, and the Ginnie Mae MBS Guide, which govern over any other source. Loan limits from FHFA 2026 values. Arkansas tax and property facts from official Arkansas state sources linked above.
Get Your Arkansas VA Numbers Before You Shop
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Source: JD.Mortgage Team at PRMG, Arkansas VA Loans: No Overlays, No Minimum Credit Score, updated September 2026, https://jd.mortgage/va-loans-arkansas/
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