Down Payment Assistance Programs for First-Time Homebuyers in Arkansas

The “Natural State” is famous for the Ozark and Ouachita Mountains. The many lakes and rivers found in Arkansas also explain why it got this nickname. The sheer natural beauty of Arkansas attracts folks from all over the US who arrive here mostly as tourists and hikers but also as future residents. However, this state is currently in a housing crisis and needs 50,000 new units to accommodate a growing populace. So, the state government has implemented programs to financially assist first-time homebuyers.

Looking for Assistance in a Specific Part of Arkansas?

This page gives an overview of the assistance programs available to first-time homebuyers in Arkansas. It’ll cover statewide and local resources. For specific information on down payment assistance in your area, refer to the local resource provided here:

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Down Payment Assistance in Arkansas

Like other states, home prices in Arkansas have also increased in the past few years. They are up by over 4%, reflecting a median price of $258,000 when last estimated by Redfin.

However, you can leverage numerous down payment assistance programs to own a home in Arkansas. Stairs Financial offers insights into some of these affordable housing programs. Locals can use this info to choose the ideal financial assistance option.

Arkansas Dream Down Payment Initiative

The Arkansas Dream Down Payment Initiative (ADDI) helps eligible homebuyers in overcoming financial barriers to homeownership. This forgivable loan has no monthly payment structure and doesn’t need to be repaid if the homebuyer stays in that house as their primary residence for 5 years.

Fundamentals

• Assistance type: Forgivable second mortgage
• Sponsor: Housing Initiative Partnership, Inc.
• Assistance amount: $10,000 (at max)

Eligibility requirements

• The property should be the buyer’s primary residence.
• The buyer must complete a homebuyer education course.
• The buyer’s income limit must be set at 120% of the area median income.

ADFA Down Payment Assistance Program

This DPA program is made for moderate-income borrowers who can afford a mortgage but require help with upfront costs. As per the ADFA Down Payment Assistance Program, you get funded if you’ve used “ADFA StartSmart” or “ADFA Move-Up” first mortgage. So, this program matches the interest rate of the first mortgage with a 10-year term.

Fundamentals

• Assistance type: Second mortgage with a 10-year term
• Sponsor: Arkansas Development Finance Authority (ADFA)
• Assistance amount: $15,000 (at max)

Eligibility requirements

• This house must be the buyer’s primary residence.
• The buyer must have an ADFA Move-Up or StartSmart first mortgage.
• The buyer is required to meet an income limit specified by their area of choice.
• The buyer must also complete a homebuyer education course before closing the deal.

Arkansas Down Payment Assistance Program FAQs

Here are some common questions from first-time homebuyers in Arkansas seeking financial assistance with down payments:

1.  Are you eligible for down payment assistance?

The state of Arkansas lets first-time homebuyers and low-to-moderate income earners use these down payment assistance programs, provided they are purchasing a primary residence. Homebuyers also have to complete homebuyer education courses and have specific certain limits.

2.  What are the costs associated with these programs?

Some down payment assistance programs in Arkansas come with higher interest rates or extra fees. As a result, homebuyers must review the terms of the assistance to understand their financial obligations. As an example, they have to stay in that house for a certain number of years to avoid repayment.

3.  What happens if you don’t have enough funds for a down payment?

In that case, if you don’t have enough funds for a down payment, you can use options like FHA, USDA, and VA loans. However, the best way to finance one’s home-buying aspirations is to use payment assistance programs outlined above.

Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation.