For many homebuyers across Arkansas, qualifying for a mortgage isn’t the hardest part of buying a home; it’s coming up with the cash needed for the down payment and closing costs. Even buyers with steady income and solid credit often find that upfront costs delay their plans for homeownership.
The ADFA Down Payment Assistance Program from the Arkansas Development Finance Authority helps solve that problem by providing second-mortgage assistance that reduces the upfront cash needed to purchase a home.
What This Program Offers
The ADFA Down Payment Assistance Program provides financial assistance specifically designed to lower the cash required at closing.
Key program benefits include:
- $1,000 to $15,000 available for down payment and closing costs
- Assistance is structured as a second mortgage with a 10-year term
- Interest rate typically matches the first mortgage rate
- Can be paired with ADFA StartSmart or ADFA Move-Up first mortgage programs
- Allows funds to be used for eligible expenses, including certain paid outside of closing (POC) costs
Because the assistance is spread over time through a second mortgage, buyers can move forward with homeownership without needing to save a large amount upfront.
Who This Program Is Designed For
The ADFA Down Payment Assistance Program is designed for buyers who are financially ready to own a home but need help covering upfront expenses.
This program may be a good fit for:
- First-time homebuyers entering the market
- Repeat buyers using ADFA Move-Up financing
- Households with stable income but limited savings
- Buyers who can afford monthly payments but need upfront assistance
The program is available statewide to eligible buyers using ADFA-approved loan products.
Eligibility Snapshot
While exact limits vary depending on location and program structure, typical guidelines include:
- Must use an ADFA StartSmart or ADFA Move-Up first mortgage
- Meeting income limits based on Area Median Income (AMI)
- Completion of a homebuyer counseling program prior to closing
- Ability to qualify with a participating lender
- Purchase of a primary residence in Arkansas
Income limits and eligibility criteria may vary by county and loan type.
Who Should Take Action
Buyers who are ready to purchase a home but are struggling to save upfront costs should consider exploring this program.
For many households, access to up to $15,000 in assistance can make the difference between continuing to rent and moving forward with homeownership.
What to Do Next
If you’re considering buying a home in Arkansas, ask a participating lender about the ADFA Down Payment Assistance Program. A lender can help you understand how the second mortgage works, confirm your eligibility, and guide you through the application process.
The ADFA Down Payment Assistance Program is one of several programs available through ADFA. Depending on your financial situation, there may be additional assistance options, including forgivable programs, that can further reduce your upfront costs.
Visit Homebuyer Wallet to explore other homebuyer programs that may be available to you.