The Best Down Payment Assistance Programs For First Time Home Buyers

Two out of every three homeowners say that coming up with a down payment is the biggest obstacle to home ownership. If you are considering buying a home you have probably heard of these down payment assistance programs that offer assistance to first time home buyers and allows you to buy with no money down.

Today I want to talk about what down payment assistance programs are, the different types of down payment assistance and what you need to qualify.

 

What Is Down Payment Assistance?

 

DPA encompasses all different types of grants and loans that can ideally help you cover all of your down payment or at least a significant portion of it that is needed to buy a house.
There are 2000+ loan programs nationwide specifically for dpa. So, no matter what state you are in, there is probably one that you can qualify for and use to get in a home sooner.

 

Types of Down Payment Assistance Programs

 

Down Payment Grant– This is given to you and you never have to pay it back. The state will give qualifying home buyers money towards their down payment with no repayment or repayment plan required.

Second Mortgage Loan Paid Down Over Time – An independent loan for your down payment that you will also make payments on in addition to your home loan. Just like it is possible to finance a couch or new phone, with this program you finance out your down payment.

Second Mortgage Loan Paid Back When You Sell – This type of down payment assistance is not one that you make payments on regularly. Rather, this loan is paid off in full from your net proceeds when you sell your home in a few years. Just be aware, if you do not stay in your home long enough to build up the equity needed to pay off the down payment loan, you will need to cover the rest that is still owed.

Second Mortgage Loan Forgiven – With this type of down payment assistance, the loan that covers your down payment is forgiven after a certain amount of time. This is most commonly 5 years. If you do not stay in that house and keep it as your primary residence for 5 years, you will need to pay the assistance loan back.

 

Who Can Qualify For Down Payment Assistance

 

  • First Time Home Buyers
  • Low to Moderate Income Earners
  • 580+ credit score needed for most programs
  • Must be using the house for your primary residence

 

Down Payment Assistance Programs Available in Arkansas

 

ADFA Down Payment Assistance Program (DPA)
This program provides up to $10,000 to eligible Arkansas homebuyers for down payment and closing cost assistance. The ADFA DPA loan is a second mortgage with a 10 year term. Learn more about the ADFA Down Payment Assistance Program here.

Arkansas Dream Down Payment Initiative (ADDI)
The Arkansas Dream Down Payment Initiative (ADDI) provides the opportunity for lower income buyers in Arkansas to qualify for up to 10% of the purchase price of their home (not exceeding $10,000) in assistance. This is a second mortgage with no monthly payment that is forgivable after five years of living in the home. For more about the Arkansas Dream Down Payment Initiative and how to qualify click here.

Arkansas City Specific Down Payment Programs
Below are links to additional resources on city specific down payment assistance programs available for Little Rock, Jonesboro, Jacksonville and Pine Bluff.
Little Rock
Jonesboro
Jacksonville
Pine Bluff

USDA Rural Development Home Loan
The USDA Rural Development loan is a government backed program that allows Arkansans to purchase homes with no down payment and 100% financing in rural areas. USDA calculates “rural areas” as areas in the state with a population less than 35,000. In Arkansas, cities like Bryant, Cabot and Bella Vista are all close to metropolitan areas but still are eligible areas based on USDA requirements. View current qualifying rural development homes for sale.

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