ADFA Homeownership and Down Payment Assistance Programs https://homeloans.arkansas.gov/programs/

The Arkansas Development Finance Authority

ADFA is a public body politic and corporate, created in 1985 as a successor to the Arkansas Housing Development Agency created in 1977. ADFA’s enabling legislation authorizes it to borrow money and issue bonds to provide sufficient funding for financing affordable housing, various business and economic development projects, and capital improvements for state agencies. Effective 7/1/2017, Arkansas Student Loan Authority merged with ADFA. Both ADFA and ASLA are self-funded primarily through investment and loan earnings. ADFA also receives federal funds. ADFA is the exclusive issuer of bonds for state agencies. Neither ADFA nor ASLA is a regulatory or licensing agency. ADFA (including ASLA) is governed by a 14-member board of directors, consisting of the Director of DFA, the Treasurer of the State, eleven public members appointed by the Governor, and the President of the Authority (non-voting).

ADFA Homeownership and Down Payment Assistance Programs https://homeloans.arkansas.gov/programs/

ADFA PROGRAMS

ADFA Homeownership and Down Payment Assistance Programs make purchasing a home more affordable for low-to-moderate income families and individuals. For eligible borrowers, these programs can greatly reduce the out-of-pocket expense to the buyer.

“ADFA MOVE-UP” LOAN PROGRAM

This program offers homebuyers, an affordable mortgage. And when using an ADFA Move-Up loan, borrowers may be eligible to combine it with other ADFA single-family home buying incentives.

PROGRAM INFORMATION

Type of Loan: First Mortgage (FHA, VA, Conventional, and RD)

Interest Rates: (rates subject to change without notice) Find a Participating Lender

Loan Term: 30-year fixed-rate with no prepayment penalty

Maximum Purchase Price: $424,100 - Arkansas conventional conforming loan limit - loans that will be sold to either Fannie Mae or Freddie Mac are called conventional loans. In short, if the mortgage is not an FHA, VA (Veteran’s mortgage) or USDA (United States Department of Agriculture) loan, it’s probably a conventional mortgage loan.

SINGLE FAMILY STAFF

DENISE WELLS Assistant Single Family Program Manager Send an Email 501-682-5466

DEAN NORMAN Single Family Underwriter Send an Email 501-682-5935

LESLIE QUISENBERRY Single Family Underwriter Send an Email 501-682-5930

ADFA MCC - MORTGAGE CREDIT CERTIFICATE

The Arkansas Development Finance Authority created its Mortgage Credit Certificate Program for the residents of Arkansas, to help make homeownership of new and existing homes more affordable for individuals and families with low to moderate-income, especially first-time homebuyers.

ABOUT MCC: An MCC is a dollar-for-dollar tax credit for first time, low-to-moderate income homebuyers. The certificate is issued by ADFA and allows qualifying, taxpaying homebuyers to claim a tax credit of up to 50 percent of the mortgage interest paid per year, capped at $2,000 annually. The credit may be claimed for the life of the loan as long as the home is their primary residence.  The ADFA MCC is "FREE" to qualified applicants using one of ADFA's first mortgage loan products (ADFA Move-Up or ADFA Move-Up Choice).

HOW TO QUALIFY

1. Must be applied for prior to closing your home loan.
2. Must be a first-time homebuyer, a veteran or veteran's spouse, or purchasing a home in a targeted county which is an area of chronic economic distress as designated by the IRS. Targeted counties include Bradley, Calhoun, Chicot, Clark, Cleburne, Columbia, Conway, Crawford, Crittenden, Cross, Dallas, Desha, Drew, Jefferson, Lafayette, Lee, Lincoln, Madison, Mississippi, Monroe, Nevada, Ouachita, Perry, Phillips, Prairie, St. Francis, Scott, Searcy, White, Woodruff, and Yell.
3. Household income cannot exceed maximum limits.
4. The purchase price of a home cannot exceed $270,000.
5. The home must be the primary residence.
6. Must use an approved lender.

ADFA MCC is not part of the financing package to purchase a home. It is an incentive for first-time homebuyers to help them purchase a home. When using an ADFA MCC with a participating lender's first mortgage product, an issuance fee of 0.5% of the loan amount will be charged. All loans using an ADFA MCC must be fixed-rate and fully amortizing. The borrower claims the credit when they file their Form 1040 tax return annually. They may itemize deductions and use Form 8396 "Mortgage Interest Credit" to claim the credit. The borrower can receive an immediate benefit from the MCC Program by going to their employer and filing a revised W-4 Federal Tax Withholding Form to increase their exemptions. This will reduce the Federal tax withholdings and increase the borrower's monthly take-home pay. Note: We recommend that borrowers seek the advice of a qualified tax preparer when deciding whether or not to take advantage of an MCC. "Recapture Tax" may apply if the borrower sells the house within the first 9 years. We estimate 96% of borrowers will not be subject to "recapture tax".

ADFA DOWN PAYMENT ASSISTANCE (DPA)

For many Arkansans, the largest obstacle to homeownership is saving for the down payment and closing costs. In fact, this is a problem all too common among low to moderate-income Arkansans who have little of their paycheck left after paying for rent, utilities, transportation, insurance, and groceries. To help, the Arkansas Development Finance Authority (ADFA) created the Down Payment Assistance (DPA) Program.

ABOUT DPA

ADFA has down payment assistance for qualifying applicants of an “ADFA Move-Up” first mortgage. The DPA ranges from $1,000 to $10,000 for closing cost assistance. Cashback to the borrowers is allowed for expenses "paid outside of closing" (POC). This program is a second mortgage, matching the first mortgage, with a 10-year term.

ARKANSAS DREAM DOWN PAYMENT INITIATIVE (ADDI)

ADDI is down payment assistance provided through HOME funding by HUD.

ABOUT ADDI

With ADDI, qualifying low-income Arkansans can be provided up to 10% of the purchase price of their home, not to exceed $10,000. It is a second mortgage loan with no monthly payment and is forgivable over five years.

ADDI must be used with the "ADFA Move-Up" Loan Program. First-time homebuyers using ADDI may also qualify to receive a FREE ADFA MCC - Mortgage Credit Certificate.

HOW TO QUALIFY

1. Household income limits not above maximum.
2. Pre-Purchase Homebuyer Education Class (8 hours) is required prior to closing. Contact one of the HUD Approved Homebuyer Counseling Agencies who will help you assess.
3. Must use an approved lender.
4. Must qualify for a mortgage.