Buying your first home in Arkansas is a big step — and the good news is you don’t have to do it alone or pay for everything out of pocket. Arkansas offers several first-time home buyer programs designed to lower your down payment, reduce closing costs, and make homeownership reachable for working families across Central Arkansas.
If you’re looking to buy in the Natural State, this guide will walk you through what’s available, who qualifies, and how to take the first step. At Edge Realty, we’ve walked alongside families across our community as they used these programs to land their first home — and we’ll share what we’ve learned along the way.
This is for informational purposes only. Consult a licensed lender for personalized guidance.
WHAT ARE THE MAIN FIRST-TIME HOME BUYER PROGRAMS IN ARKANSAS?
Most first-time buyers in our area use programs offered through the Arkansas Development Finance Authority (ADFA). ADFA is a state agency that partners with approved lenders to offer below-market mortgage rates and down payment assistance.
Here are three of the most common programs you’ll hear about:
- ADFA Move-Up Loan Program — A competitive 30-year fixed mortgage available to eligible buyers. It’s open to first-time buyers and, in some cases, repeat buyers who meet income guidelines.
- ADFA Down Payment Assistance (DPA) — A second loan that helps cover your down payment and a portion of closing costs. It’s usually paired with the Move-Up first mortgage.
- Mortgage Credit Certificate (MCC) — A federal tax credit that lets eligible first-time buyers claim a portion of their annual mortgage interest as a credit on their taxes.
You may also qualify for federally backed loans like FHA, VA (a great fit for many of our LRAFB and Camp Robinson families), or USDA Rural Development loans, which work in many parts of Lonoke and White County. A good lender can help you compare them side by side.
HOW DO I QUALIFY AS A FIRST-TIME BUYER IN ARKANSAS?
Here’s the thing — “first-time buyer” doesn’t always mean what people think. Under most ADFA programs, you qualify if you haven’t owned a primary home in the last three years. That opens the door for a lot of folks who rented for a while or moved between jobs.
To use an ADFA program, you generally need:
- A credit score that meets your lender’s minimum (often around 640, though it varies by program and lender)
- Household income within ADFA’s published limits for your county
- A home price under the program’s purchase price cap
- The home as your primary residence — not a rental or vacation property
- Completion of a homebuyer education course (often free and online)
Income and price caps are updated regularly, so confirm current numbers with your lender or directly with ADFA before you start house hunting.
WHAT DOWN PAYMENT ASSISTANCE IS AVAILABLE IN CENTRAL ARKANSAS?
This is the part that surprises many buyers in our community: you may be able to buy a home with very little out of pocket.
Through ADFA’s Down Payment Assistance program, eligible buyers can receive a second loan — typically several thousand dollars — to cover the down payment and a chunk of closing costs. It’s bundled with the Move-Up first mortgage, so it’s one application and one approval process.
A few things worth knowing:
- DPA funds are usually structured as a second mortgage with their own repayment terms — your lender will walk you through the details.
- Some buyers stack ADFA programs with VA or FHA loans for even lower upfront costs.
- Several local lenders in Cabot, Sherwood, and Jacksonville handle ADFA programs every week. We’re glad to point you toward a few who do.
If you’re a teacher, law enforcement officer, firefighter, EMT, or active-duty service member, ask your lender about additional state and federal programs that may apply.
WHAT STEPS SHOULD I TAKE BEFORE APPLYING?
Buying a home isn’t just about finding the right house — it’s about being ready when you do. Here’s the order we usually walk our clients through:
- Check your credit. Pull your reports, pay down balances, and clear up any errors. Even a small credit bump can lower your interest rate.
- Build a basic budget. Look at your monthly income, debts, and savings. A reasonable rule of thumb is to keep your full housing cost (including taxes and insurance) under about 30% of your take-home pay.
- Talk to a local lender. Choose someone who works with ADFA programs and knows the Central Arkansas market. Ask about pre-approval — not just pre-qualification.
- Take the homebuyer education course. Most ADFA programs require it, and it’s genuinely useful even if it weren’t.
- Make a list of must-haves. School district, commute, yard size, room count. The cities all feel different — knowing what matters to you narrows the search fast.
- Reach out to a local agent. A good local agent translates the market for you, helps you write competitive offers, and protects your interests all the way through closing.
FREQUENTLY ASKED QUESTIONS
Q: Do I need 20% down to buy a home in Arkansas?
A: No. Many first-time buyers in Arkansas put down 3% to 5%, and some qualify for VA or USDA loans with 0% down. ADFA’s Down Payment Assistance program can cover much of what’s owed up front for eligible buyers.
Q: Can I use an ADFA program to buy a home in Cabot, AR?
A: Yes. ADFA programs are available across all of Arkansas — as long as the home and your income meet the current program limits.
Q: How long does it take to buy a home with a first-time buyer program?
A: From pre-approval to closing, plan on roughly 30 to 60 days once you’re under contract. Adding an ADFA program usually doesn’t slow things down, as long as your lender is experienced with them.
Q: What if I owned a home years ago — am I still a first-time buyer?
A: Possibly. ADFA generally considers you a first-time buyer if you haven’t owned a primary residence in the last three years. Your lender can confirm based on your situation.
Q: Are first-time home buyer programs only for low-income families?
A: Not at all. ADFA’s income limits are set to include a wide range of working households across Central Arkansas. Many teachers, nurses, military families, and tradespeople qualify without realizing it.
BRINGING IT ALL TOGETHER
Buying your first home in Arkansas is more accessible than most buyers expect — especially when you tap into the programs built to help. The hardest part is usually just knowing where to start.
We’ve walked alongside families across Cabot and Central Arkansas as they bought their first homes, and the pattern is almost always the same: a little planning, the right local lender, and an agent who knows the area make the whole process feel doable instead of overwhelming. Wherever you are right now — three months out or just starting to dream — we’d love to help you take the next step.
TALK TO EDGE REALTY
Thinking about buying your first home anywhere in Central Arkansas? The Edge Realty team knows this market inside and out — and we know the local lenders who handle ADFA programs every day. Give us a call at 501.580.4663 or visit edgerealtyar.com. We’d love to help you find the right fit.
Edge Realty is a licensed Arkansas real estate brokerage serving Cabot and Central Arkansas. Equal Housing Opportunity.