Arkansas first-time homebuyer grants and down payment assistance (2026)

ADFA’s DPA is a 10-year loan with a monthly payment

Most state housing agencies offer deferred or forgivable second mortgages. Arkansas does not. ADFA’s DPA is an amortizing loan:

• Amount: $1,000 to $15,000. You can use it for the down payment, closing costs, principal reduction and items paid outside closing. You may get up to $100 back at closing above your paid-outside-closing costs. It cannot pay for repairs or pay off debt so you qualify ⁠¹.
• Rate and term: the same interest rate as your ADFA first mortgage, repaid over 10 years only. There is no prepayment penalty and a 4% late fee ⁠¹.
• Fees: the lender may charge a $50 DPA application fee ⁠¹.

At the 6.375% StartSmart government-loan rate ADFA posted on Oct. 6, 2026 ⁠⁶, a $10,000 DPA loan works out to about $113 a month for 120 months, and $15,000 to about $169. These figures are our calculation from ADFA’s terms. That payment counts toward the 45% debt-to-income cap ⁠¹. A smaller DPA loan can therefore be the difference between approval and denial. Ask your lender to run the numbers at two or three DPA amounts. You may also put in more of your own cash and borrow less ⁠¹.

StartSmart’s 2026 county income limits and the $500,000 price cap

StartSmart limits count total household income and differ by county. ADFA publishes one figure for households of 1-2 people and one for 3 or more. The table took effect June 1, 2026. The purchase price limit is $500,000 in every county ⁠².

Scroll the table sideways to see every column.

To find your county, open ADFA’s two-page 2026 StartSmart limits PDF from the StartSmart page. Counties are listed alphabetically ⁠²⁠³.

Move-Up works differently. It has no county table. Instead, the borrower’s qualifying income can be at most $142,000, and income other than base pay can be left out if you don’t need it to qualify ⁠¹. The price is capped at the conforming loan limit, and jumbo loans are not allowed ⁠¹⁠⁴. If you pair DPA with Move-Up, the $142,000 limit applies to the DPA as well ⁠¹.

Who counts as first-time in Arkansas, and the 30 targeted counties

StartSmart’s first-time rule says no occupying borrower may have owned a principal residence in the three years before closing. The rule also covers an occupying spouse who is not on the loan. If your application shows another property or less than three years of housing history, ADFA asks for a three-year verification of residence ⁠¹. You qualify without first-time status if you are a veteran or a veteran’s spouse, or if you buy in a targeted county ⁠¹⁠³.

ADFA’s 2026 table marks 30 counties as targeted. The list includes Jefferson, Crittenden, Mississippi, Phillips, St. Francis, White, Madison, Ouachita and Columbia ⁠². A buyer who owns a home now and moves to one of these counties can still use StartSmart.

The StartSmart property also has limits: a single-family home, condo, townhome, modular home, eligible manufactured home or duplex, on no more than 5 acres. A duplex must be at least 5 years old outside targeted counties ⁠¹. Because StartSmart is bond-financed, a federal recapture tax can apply if you sell within 9 years, have a gain and earn above the federal limit that year. ADFA’s guidelines say it will reimburse that tax if you ask ⁠¹.

Credit, DTI and underwriting: 640 score, 45% cap, no manual files

ADFA applies the same thresholds to StartSmart and Move-Up on FHA, VA, USDA Rural Development and Freddie Mac HFA Advantage conventional loans ⁠¹:

• Credit score: 640 minimum median score for every applicant, including a non-occupant co-signer. One traditional trade line can be enough, but non-traditional credit is not accepted.
• DTI: 45.000% maximum, including the DPA payment.
• Underwriting: automated only (DU, LPA or GUS approval). A “refer” finding or manual underwriting is not allowed.
• Costs: the lender may charge up to a 1% origination fee plus normal fees. Discount points, permanent buydowns and rate-lock extension fees cannot be charged to you.

On Oct. 6, 2026, ADFA posted rates of 6.375% for a StartSmart government loan and 6.625% for its Freddie Mac loan below 80% of area median income. Move-Up was 7.375% to 7.50% ⁠⁶. Rates are reset daily ⁠¹.

Homebuyer education: ADFA has no course of its own

The guidelines say ADFA has no homebuyer education requirement of its own. You follow the rules of the first-mortgage type ⁠¹. In practice:

• Freddie Mac HFA Advantage conventional: if every occupying borrower is a first-time buyer, at least one must finish a course. ADFA accepts Freddie Mac’s CreditSmart Homebuyer U, which it notes is not HUD-certified. CreditSmart Essentials does not count ⁠¹.
• FHA, VA and USDA: follow the agency’s or the underwriting findings’ requirement ⁠¹.
• City programs: Little Rock and Jonesboro both require a course. Little Rock’s HAP and Jonesboro require it from a HUD-approved counseling agency ⁠⁹⁠¹¹⁠¹².

If you plan to stack city money on an ADFA loan, take a HUD-approved course from the start so one certificate covers both.

No mortgage credit certificate in ADFA’s 2026 lineup

ADFA ran mortgage credit certificate programs in earlier years. Its current program list shows only StartSmart, Down Payment Assistance and Move-Up for homeownership, with no MCC ⁠⁸. The 2026 guidelines describe no MCC either ⁠¹. Some lender and real estate sites still advertise an Arkansas MCC or the old Arkansas Dream Downpayment Initiative. Neither appears on ADFA’s official program pages, so do not plan your budget around them.

Little Rock and Jonesboro city money

• City of Little Rock Down Payment Assistance Program. Up to 6% of the purchase price, capped at $10,000, for first-time buyers (no home owned in three years) at or below 80% of AMI. The home must be inside Little Rock city limits. The loan is forgiven in equal monthly amounts over 60 months, and you must own and live in the home for five years. The city’s most recent flyer lists 2025 limits, effective April 1, 2025 until replaced: $51,950 for one person, $74,150 for four and $97,900 for eight. Your lender must have an office in Arkansas, and repairs must be finished before approval ⁠⁹. The city does not publish how much money is left.
• Little Rock CDBG-DR Homebuyer Assistance Program (HAP). This is tornado-recovery money. It pays the lesser of $15,000 or 8% of the price as a loan forgiven over five years, and the city has allocated $1,000,000 to it ⁠¹⁰. You do not need to have been a tornado victim. All of Little Rock is a HUD “most impacted” area, so any home inside city limits qualifies ⁠¹⁰⁠¹¹. The web page sets the income limit at 150% of AMI ⁠¹⁰. The March 23, 2026 manual says 120% ⁠¹¹. Ask the city which one your file will use. If you sell or move out during the five years, you repay the unforgiven balance ⁠¹¹.
• Jonesboro First-Time Homebuyer Assistance. Up to $5,000 in CDBG funds, paid to the title company for closing costs and down payment, with a three-year forgivable lien. The home must be inside Jonesboro city limits, outside a flood zone and pass HUD housing quality standards. You must meet federal income guidelines and finish a HUD-approved course ⁠¹².

Getting an ADFA loan through a participating lender, step by step

1. Check your county limit

   Find your county in ADFA’s June 1, 2026 StartSmart table. If you are over the limit, compare Move-Up’s $142,000 qualifying-income cap ⁠²⁠⁴.

2. Find an ADFA loan officer

   Use ADFA’s Find a Lender map. If no one is listed near you, call (501) 682-5900 ⁠⁷. In Little Rock or Jonesboro, ask whether the lender also works with the city program ⁠⁹⁠¹².

3. Get pre-approved under ADFA’s rules

   The lender checks the 640 median score, a 45% DTI that includes the DPA payment, and an automated approval ⁠¹.

4. Gather documents

   Bring your two most recent pay stubs (from the last 30 days). Self-employed buyers need two years of signed tax returns, W-2s or 1099s and a signed year-to-date profit and loss statement. Add any child support court order, and veteran documents if you are using the veteran exception ⁠¹⁠³.

5. Finish any required course

   Do this before closing. Choose a HUD-approved agency if you are adding city money ⁠¹⁠¹¹.

6. Lender reserves your loan

   The reservation locks your rate for 60 days. For StartSmart, the lender must upload a compliance package within 5 days or the reservation is canceled. The closing package is due within 50 days ⁠¹.

7. DPA award letter and closing

   The lender requests the DPA award letter by email at least 24-48 business hours before closing. At closing, it funds both the first and second mortgage ⁠¹.

If ADFA cancels a reservation for a missed deadline, reinstatement depends on available funds. Ask your lender to resubmit right away ⁠¹. If a lender turns you down, another ADFA participating lender can run your file again under the same rules. Compare other states on the first-time homebuyer grants page.