Mortgage rates in Arkansas
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First-time homebuyer programs in Arkansas
Buying a home for the first time can be challenging, but the Arkansas Development Finance Authority (ADFA) has the resources to make it a little easier.
The ADFA has a number of programs for first-time homebuyers that will reduce your out-of-pocket expenses. For qualified applicants, the ADFA can help secure a mortgage, supply a tax credit certificate, provide funds for a down payment and more.
The ADFA’s Move-Up program offers first-time homebuyers affordable mortgages, whether that’s a conventional loan or through the FHA, VA or USDA. Working through an approved lender, you can secure a 30-year fixed-rate mortgage with no prepayment penalty.
Borrowers may be eligible to combine it with other ADFA single-family-home-buying incentives as well. However, there is currently a maximum purchase price of $421,100 for this program.
ADFA Mortgage Credit Certificate (MCC) Program
A Mortgage Credit Certificate (MCC) is a dollar-for-dollar tax credit for first-time, low-to-moderate-income homebuyers. The certificate allows qualifying homebuyers to claim a tax credit of up to 50% of the mortgage interest they pay each year, capped at $2,000. As long as the home remains your primary residence, you can claim this credit for the life of the loan.
To qualify, you’ll need:
- To apply prior to closing your home loan.
- To be a first-time homebuyer, a veteran or the spouse of a veteran or purchasing a home in a targeted county referenced on the ADFA website.
- A household income below the set limit.
- To purchase a home for less than $270,000.
- To have the home as your primary residence.
- To use an approved lender. The savings can be substantial, but be aware that when you use an ADFA MCC, you’ll be charged an issuance fee of 0.5% of the loan amount.
ADFA Down Payment Assistance Program (DPA)
If you qualify for the ADFA Move-Up program, you can also apply for down payment assistance.
Qualified applicants receive between $1,000 and $10,000 to help with their down payment and closing costs. Cash back is allowed for expenses “paid outside of closing.”
Arkansas Dream Down Payment Initiative (ADDI)
Through ADDI, qualifying low-income Arkansans can get up to 10% of the purchase price of their home, up to a maximum of $10,000. This is technically considered a second mortgage but has no monthly payments and is normally forgiven over five years.
ADDI must be used with the Move-Up program. First-time homebuyers using ADDI may also qualify for the MCC.
Note, if you’re using ADDI or the DPA Program to purchase a home, ADFA will require you to take a pre-purchase homebuyer education course.
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