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 youโre not sure if you can afford it? Donโt fret โ 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 havenโt owned a home in the past three years or longer.
As always, when youโre doing your research, read the fine print and any limitations we list below. Some programs are only applicable once so if youโve claimed this benefit, you wonโt be able to do so again.
And hereโs some good news: most of the state and local programs described below arenโt 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 programโs details and their fine print below.
ADFA Move-Up
Move-Up is one of the ADFAโs flagship programs, providing homebuyers with an affordable, 30-year fixed-rate mortgage with no prepayment penalty.
While the program isnโt 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 youโll have to work with participating lenders.
Eligible property types include single-family homes, modular homes and condominiums. Mobile homes arenโt 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. Youโll also need to complete a homebuyerโs education class.
Check out the Down Payment Assistance program.
Arkansas Dream Down Payment Initiative (ADDI)
If youโre 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 doesnโt exceed ADFA limits. Youโll need to complete a homebuyerโs education class, and you must qualify for your Move-Up mortgage via a participating lender.
Itโs worth doing your homework to see if youโre eligible. While youโll have to pay back the DPA at a low interest rate, ADDI doesnโt need to be repaid! Itโs 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, itโs 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 โ and triple dip โ where possible. If youโre a first-time homebuyer securing a Move-Up loan, and youโre 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 shouldnโt 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 โ 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.
Fort Smith
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 homeโs purchase price (with a sales price limit of $125,000).
There is no first-time homebuyer requirement but youโll have to complete coursework and prove financial need to qualify according to the cityโs 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.
Jacksonville
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. Hereโs Jacksonvilleโs official website for more information.
Jonesboro
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 youโre 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 youโre 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. Youโll also need to attend a homebuyerโs education course. Check out the Jonesboro Homeownership Assistance program.
Little Rock
Want to find a home in Little Rock? Arkansasโ capital city has a string of initiatives to help residents ready to set down roots for their family.
Little Rockโs 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 youโll need to document your household income to qualify.
Youโll also need to live in the home for at least five years, and complete a homebuyerโs 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 isnโt for first-time homebuyers โ 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 itโs useful to keep this resource in your back pocket in case you need it.
Pine Bluff
Whether youโre 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. Youโre on the hook for closing costs above $3,000, and youโll 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 wonโt have to make any repayments.
The focus is on helping Pine Bluff locals who need the financial assistance โ youโll need to show your householdโs annual income is below the cityโs 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 Rockโs. 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 countryโs most affordable properties. The state is sprinkled with parks, mountains, rivers and hot springs so thereโs no doubt your new home will be surrounded by natureโs beauty.
If youโre shopping for a home in the Natural State, youโll have your pick of property types and communities across Arkansas. And no matter where youโve set your sights, there are several programs to help you secure your home purchase.
Check out more listings across the state of Arkansas and follow us on social media for more home shopping tips and tricks!
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.
Other Arkansas Resources
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.