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If you’re thinking about buying your first home in Arkansas, coming up with the money for a down payment and closing costs can feel like the biggest hurdle.
The good news is that you may have more options than you think. Depending on your income, credit, the home you choose and the loan program, you may qualify for down payment assistance or a mortgage that requires a low down payment or none at all.
Here are a few options worth exploring.
1. ADFA StartSmart and Down Payment Assistance
The Arkansas Development Finance Authority, or ADFA, offers the StartSmart first-time homebuyer program through participating lenders.
Eligible buyers may also qualify for $1,000 to $15,000 in down payment assistance to help with their down payment and closing costs.
One important detail: this assistance is a second mortgage that must be repaid, not a grant. It is repaid over 10 years at the same interest rate as the first mortgage. Income, credit, purchase-price and other requirements apply.
2. USDA Rural Development Loans
A USDA Rural Development loan may allow eligible buyers to purchase a home with no down payment.
The property must be in an eligible area, and household income and other requirements apply. Parts of Northwest Arkansas and surrounding communities may qualify, but you’ll want to check the specific address.
Keep in mind that zero down does not necessarily mean zero cash at closing. USDA loans also have guarantee fees.
3. FHA Loans and Down Payment Assistance
An FHA loan may be an option if you’re looking for a lower down payment. Qualified buyers can put down as little as 3.5%.
Some buyers may be able to combine an FHA loan with a separate down payment assistance program. Those programs have their own requirements, and the assistance may be a grant or a loan that has to be repaid.
The right combination depends on your situation, so it’s important to review the details with a lender before assuming how much cash you’ll need.
Where Should You Start?
Before you start touring homes, talk with a lender about your budget and which programs might fit. A little preparation can help you understand your monthly payment, down payment and other costs before you fall in love with a home.
Jonathan Buck at Responsive Mortgage is a lender partner of ours who can help you explore your options and work toward preapproval.
Apply with Jonathan Buck at Responsive Mortgage
Once you have an idea of your budget, check out our Northwest Arkansas home buyer guide, compare local communities, or start looking at homes under $300,000.
If you have questions about the home search, reach out to our team. We’d be happy to help.
Programs, funding and eligibility requirements can change. Loan approval and assistance depend on the buyer, property and lender requirements.