Arkansas Down Payment Assistance

Arkansas, also known as the Natural State, is a famous for its quartz production, spinach farms, folk music, and archery. It's also one of the states with the lowest average mortgage debt and median house prices! This means if you're looking to purchase real estate, you might find a good deal in Arkansas.

There are also local and national programs exist that offer down payment assistance and grants to qualified applicants. The Arkansas Development Finance Authority and other organizations offer the following programs.

If you're thinking about purchasing a home in Arkansas, you may have options to help with the down payment or closing costs. Click on any program below to learn more and see if it can help with your home purchase!

ADFA Down Payment Assistance

Developed by the Arkansas Development Finance Authority (ADFA), this down payment assistance program offers between $1,000 and $6,000 to help cover the costs of closing, the down payment, or other prepaid items. This is a second mortgage with a 10-year term and a 4% interest rate (as of April 7, 2020 – subject to change with no notice). Applicants are allowed to receive cashback for certain expenses outside of the closing costs.

This DPA program must be used in combination with an ADFA Move-Up Home Loan. Applicants must also finish a homebuying counseling program.

American Dream Downpayment Initiative

ADDI, or the American Dream Downpayment Initiative, is offered by the Arkansas Development Finance Authority (ADFA). In order to be eligible for ADDI, applicants must fall within certain annual household income limits, be first-time homebuyers, and finish 8 hours of a homebuying counseling course. As much as $10,000 (or up to 6% of the purchase price of the property) is offered as downpayment and closing cost assistance. This is a second mortgage that can be forgiven in annual installments over the course of five years, with the condition that the borrower continues to use the property as their primary residence and pays insurance and taxes on the house.

Jonesboro Homeownership Assistance Program

The Homeownership Assistance Program is available through the Grants and Community Development Departments of the City of Jonesboro. The program pays assistance funds to the title company directly.

Eligible applicants must have not owned a house in the previous three years, be first-time homebuyers, fall within certain annual household income limits and complete a HUD-approved homebuying education class, which can be done either in person or online.

Properties purchased using this program must be in Jonesboro but not in a flood zone. They must also meet the Minimum Housing Quality Standards from the HUD.

City of Pine Bluff Homebuyers Assistance Program

The Homebuyers Assistance Program, offered by the Economic and Community Development Department of Pine Bluff, allows qualified individuals to receive as much as $2,000 for down payment costs and $3,000 for closing costs (which does not include prepaid items). This is a deferred loan with a five-year term and 0% interest. The borrower does not need to pay back the loan unless the house is sold, transferred, refinanced, or otherwise disposed of before the five-year term is over.

Qualified applicants must meet specific annual household income limits – they must be of low-to-moderate income and their annual household income cannot be more than 80% of the area median income. For 2020, those limits are as follows:

1 person: $27,000
2 persons: $30,850
3 persons: $34,700
4 persons: $38,550
5 persons: $41,650
6 persons: $44,700
7 persons: $47,850
8 persons: $50,900

Applicants must also pay at least $500 towards the down payment from their own funds.

City of Fort Smith Down Payment Assistance Program

Offered by the Crawford-Sebastian Homeownership Center, this program requires that qualified applicants utilize the purchase property as their primary residence, use an approved lender, complete a homebuying education course, and attend 1-on-1 budget counseling.

The City of Fort Smith DPA program is available for buyers purchasing a property within the city limits of Fort Smith. 3.5% of the purchase price of the home is available as assistance funds to cover part or all of the down payment and/or closing costs. If there is a demonstrated need, it may also be allowed for a principal reduction of the mortgage loan.

This is a loan that does not need to be repaid providing that the buyer uses the house as their primary residence for a minimum of 5 years.

The purchase property will need to be inspected, and if it was built prior to 1978, will need to be inspected for lead based paint. The property cannot exceed a sales price of $125,000 as of 2017.

This program is for families with low income.

Crawford-Sebastian Homeownership Center Affordable Housing Program

Offered by the Crawford-Sebastian Homeownership Center, this program requires that qualified applicants utilize the purchase property as their primary residence, use an approved lender, complete a homebuying education course, and attend 1-on-1 budget counseling.

A $4,000 grant is available to help cover the down payment and closing costs. The grant does not need to be repaid providing that the buyer uses the house as their primary residence for a minimum of 5 years.

In order to receive this grant, the borrower must use Armstrong Bank to finance their mortgage.

$500 of the grant must be used as a counseling fee. And additional $500 from the buyer’s own funds must be invested.

This program is only available to first-time homebuyers or single parents with dependents. Applicants must also be from a low-income family.

This program is only available in certain areas.

Crawford-Sebastian Homeownership Center Down Payment Assistance

Offered by the Crawford-Sebastian Homeownership Center, this program requires that qualified applicants utilize the purchase property as their primary residence, use an approved lender, complete a homebuying education course, and attend 1-on-1 budget counseling.

This is a 10-year second mortgage to help with the costs of the down payment, closing costs, and other prepaid items. Borrowers can receive between $1,000 and $6,000. Cash back can be offered to homebuyers at the closing in order to pay for expenses that were paid up front.

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