With over two million acres of forests and 47 hot springs, Arkansas is home to stunning properties and a thriving real estate market.
Are you dreaming of owning a home in Arkansas but you’re not sure if you can afford it? Don’t fret – turns out, homebuyers in the Natural State have plenty of statewide and local homeownership assistance programs to help with everything from your mortgage and down payment, to closing costs and taxes.
Check out our comprehensive list of homeownership assistance programs and incentives across Arkansas to learn what you need to know to qualify and to apply.
Who Qualifies as a First-Time Homebuyer in Arkansas?
For a quick clarification, a first-time homebuyer is defined as any family or individual who has never owned a home, or at least not in the past few years depending on the region. Some local programs, for example, suggest residents of Arkansas are still eligible if they haven’t owned a home in the past three years or longer.
As always, when you’re doing your research, read the fine print and any limitations we list below. Some programs are only applicable once so if you’ve claimed this benefit, you won’t be able to do so again.
And here’s some good news: most of the state and local programs described below aren’t restricted to first-time homebuyers! The emphasis is on helping low-income families across Arkansas own their own home.
Statewide Homeownership Assistance Programs
The Arkansas Development Finance Authority (ADFA) has a series of statewide assistance programs that are worth exploring for first-time homeowners and repeat buyers. While the programs differ, the overarching requirements include being a resident of Arkansas, working with a participating lender, and purchasing eligible property types.
We have each program’s details and their fine print below.
Move-Up is one of the ADFA’s flagship programs, providing homebuyers with an affordable, 30-year fixed-rate mortgage with no prepayment penalty.
While the program isn’t specifically for first-time homebuyers, it may be a useful tool in helping secure a loan with lower credit score requirements. Keep in mind, the maximum home purchase price is $424,100 and you’ll have to work with participating lenders.
Eligible property types include single-family homes, modular homes and condominiums. Mobile homes aren’t eligible.
Move-Up can be combined with other ADFA programs outlined below. Read more about the Move-Up program on its official site.
AFDA Down Payment Assistance
Saving up for a down payment is one of the biggest hurdles homebuyers need to clear. If you qualify for a Move-Up mortgage, the ADFA also provides financial assistance starting at $1,000 up to $10,000 to help with your mortgage and closing costs.
The DPA is repaid as a 10-year second mortgage, alongside your Move-Up home loan with identical interest rates.
The program is offered to all homebuyers, as long as you secure a Move-Up program loan. You’ll also need to complete a homebuyer’s education class.
Check out the Down Payment Assistance program.
Arkansas Dream Down Payment Initiative (ADDI)
If you’re eligible, ADDI sweetens the deal for low-income homebuyers taking out a Move-Up home loan. In this case, ADDI provides homebuyers with up to 10 percent of the purchase price of their home. This is a no monthly payment forgivable loan worth up to $10,000.
The catch? Homebuyers need to show their household income doesn’t exceed ADFA limits. You’ll need to complete a homebuyer’s education class, and you must qualify for your Move-Up mortgage via a participating lender.
It’s worth doing your homework to see if you’re eligible. While you’ll have to pay back the DPA at a low interest rate, ADDI doesn’t need to be repaid! It’s free money up for grabs for the households who need it most.
Read more about the AFDA ADDI program.
Mortgage Credit Certificate
The MCC, created by the ADFA, is the single statewide first-time homebuyer program. In a nutshell, it’s a dollar-for-dollar tax credit saved for first-time, low- to middle-income homebuyers.
Certificates are issued by the ADFA so homebuyers can claim a tax credit of up to 50 percent of their mortgage interest paid each year. The maximum annual credit is $2,000, and the credit can be claimed for as long as you use the property as your primary residence.
The AFDA encourages applicants to double – and triple dip – where possible. If you’re a first-time homebuyer securing a Move-Up loan, and you’re eligible for a DPA or ADDI, you can apply for an MCC for a tax break to boot.
The MCC comes with some important fine print: you need to apply for a certificate before closing on your home loan, your new home purchase shouldn’t exceed $270,000, and you must be a first-time homebuyer, a veteran, or a homebuyer purchasing a property in targeted counties.
See the full list of requirements for the AFDA MCC.
Homebuyer Programs by Location in Arkansas
While the statewide programs listed above can give you a leg up on your journey to homeownership, there are local homebuyer assistance programs across Arkansas worth doing your research on, too.
The programs are a mixed bag – some are exclusively for first-time homebuyers, while others shift the focus to any homebuyers who are from a lower-income bracket. Read more for our full rundown of local programs.
If your heart is set on buying a home in Fort Smith, you might be able to secure down payment funding of about 3.5 percent of your home’s purchase price (with a sales price limit of $125,000).
There is no first-time homebuyer requirement but you’ll have to complete coursework and prove financial need to qualify according to the city’s low-income guidelines.
The city will also conduct a home inspection on your purchase at no expense to the buyer.
Fort Smith also operates an Affordable Housing Program. In this instance, a $4,000 grant is up for grabs to help with your down payment and closing costs. This program is exclusive to first-time homebuyers or single parents. Read more about the AHP.
While the details are limited, homebuyers in Jacksonville can take advantage of an assistance grant that will pay half of your out-of-pocket expenses at closing. You can apply for up to $3,000 in funding. Here’s Jacksonville’s official website for more information.
Jonesboro, the fifth largest city in Arkansas, is one of the best places to live in the state; it is packed with parks for growing families and young professionals to enjoy. If you’re shopping for a home in Jonesboro, the city runs a homeownership assistance program aimed at helping first-time homebuyers who need that financial boost.
If you’re eligible, the program will help you with a grant to cover your down payment or closing costs, paid directly to your title company. This extra help could save you thousands of dollars.
First, you need to qualify for a mortgage, then fill out an extensive application form detailing your household income and monthly expenses.
You must be a first-time homebuyer purchasing a home within Jonesboro city limits. You’ll also need to attend a homebuyer’s education course. Check out the Jonesboro Homeownership Assistance program.
Want to find a home in Little Rock? Arkansas’ capital city has a string of initiatives to help residents ready to set down roots for their family.
Little Rock’s down payment assistance program provides up to $5,000 to low-income first-time homebuyers purchasing a home within the city limits. You must not have owned a home within the last three years and you’ll need to document your household income to qualify.
You’ll also need to live in the home for at least five years, and complete a homebuyer’s counseling course. Here are the full details.
Little Rock runs the Save-A-Home program for low-income homebuyers. In this case, the city rehabilitates an outdated home then sells it to a low-income homebuyer at a fraction of the cost. If your roadblock to homeownership is money, this could be worth exploring. Read more about Save-A-Home and the available properties.
Little Rock also sets aside funding for an Emergency Assistance Grant program, which provides a deferred payment loan of up to $10,000 for homeowners who are 62 or older, disabled, or in a low-income category.
This grant isn’t for first-time homebuyers – you must have lived in the home within the last year to qualify. The funding can be used for any construction work that needs to be done to your property in an emergency situation, from heating and plumbing to electrical work and roof repairs.
Keep in mind, these unexpected expenses can cost a small fortune, so it’s useful to keep this resource in your back pocket in case you need it.
Whether you’re a first-time homebuyer or a repeat buyer, Pine Bluff has two generous assistance programs available.
Via the Homebuyers Assistance Program, low-income families can apply for up to $2,000 in down payment assistance and up to $3,000 for closing costs. You’re on the hook for closing costs above $3,000, and you’ll have to contribute a minimum of $500 to your down payment.
The funding is presented as a deferred loan. As long as you stay in the home for at least five years, you won’t have to make any repayments.
The focus is on helping Pine Bluff locals who need the financial assistance – you’ll need to show your household’s annual income is below the city’s average to qualify. Visit the Pine Bluff official website for more information and how to apply.
Pine Bluff also runs an Emergency Rehab funding program similar to Little Rock’s. Low-income homeowners can apply for up to $10,000 to help them make repairs so that the property meets standard housing codes.
Ready to Buy a Home in Arkansas?
Arkansas has a huge real estate market, with some of the country’s most affordable properties. The state is sprinkled with parks, mountains, rivers and hot springs so there’s no doubt your new home will be surrounded by nature’s beauty.
If you’re shopping for a home in the Natural State, you’ll have your pick of property types and communities across Arkansas. And no matter where you’ve set your sights, there are several programs to help you secure your home purchase.
The links on this site were researched by NewHomeSource. This is as cohesive a list as possible. Individual homebuyers should contact entities to fully understand requirements and processes.
Carmen Chai is an award-winning Canadian journalist who has lived and reported from major cities such as Vancouver, Toronto, London and Paris. For NewHomeSource, Carmen covers a variety of topics, including insurance, mortgages, and more.