First-Time Home Buyer Programs in Arkansas & Little Rock

Buying your first home in Little Rock can feel exciting and overwhelming at the same time. You might be wondering how to cover the down payment, which loan fits your situation, and how local rules affect your options. This guide breaks down the main first-time buyer programs you can use in Pulaski County, what to expect in Little Rock’s market, and simple steps to move from research to keys. You will walk away with clear next steps, example costs, and links to official resources to check eligibility and requirements. Let’s dive in.

First-time buyer programs at a glance

ADFA: Arkansas state assistance

The Arkansas Development Finance Authority (ADFA) partners with participating lenders to offer fixed-rate mortgages and down payment assistance for eligible buyers statewide. You apply through an ADFA-approved lender, not directly with the state. Review details and current offerings on the official ADFA homebuyer programs page.

• What it offers: Primary loans (conventional, FHA, VA, USDA through participating lenders) and down payment assistance that may be a second loan or forgivable assistance.
• Typical requirements: Arkansas purchase, first-time buyer definition per program, income and purchase price limits for some products, minimum credit standards, and homebuyer education for DPA when required. Verify the latest details on the ADFA site.
• Pros: Can reduce or eliminate the down payment and pairs with common loan types through local lenders.
• Considerations: Extra program steps and timelines, education requirements, and potential occupancy or resale rules. Lender overlays vary.

FHA: Low down payment with flexible credit

The Federal Housing Administration insures loans that allow low down payments and flexible credit standards. See the official FHA guidelines from HUD for current rules.

• Minimum down: 3.5% for borrowers with FICO 580 or higher; 10% down is often required if your score is between 500 and 579.
• Insurance: FHA charges an upfront mortgage insurance premium at closing and an annual mortgage insurance premium paid monthly. For most loans with less than 10% down, monthly MIP typically lasts for the life of the loan.
• Pros: Lower credit score allowances and flexible income and asset treatment.
• Considerations: Ongoing mortgage insurance adds cost, and the property must meet FHA condition standards.

VA: Zero down for eligible service members and veterans

The Department of Veterans Affairs guarantees loans that allow eligible borrowers to buy with no down payment in many cases. Read about the VA funding fee and closing costs and basic eligibility on VA.gov.

• Down payment: No statutory minimum for eligible borrowers.
• Fees: One-time funding fee applies unless you qualify for an exemption. Many lenders require a minimum credit score and apply debt-to-income guidelines.
• Pros: Zero down and no monthly mortgage insurance, often with competitive rates.
• Considerations: Funding fee unless exempt, VA property standards, and lender overlays.

USDA: Zero down in eligible areas

The USDA Single Family Housing Guaranteed Loan Program offers zero-down financing for eligible properties in defined rural areas, along with household income limits. See the USDA program overview and check addresses on the USDA property eligibility map.

• Down payment: Zero down for eligible properties and households.
• Fees: Upfront guarantee fee and an annual fee added to the monthly payment.
• Pros: Zero down and typically competitive rates.
• Considerations: Property must be in a USDA-eligible area and household income must fall under county limits. Many in-town Little Rock addresses are not eligible, while some outlying parts of Pulaski County may be.

Conventional first-time buyer options

Conventional loans can go as low as 3% down for qualified first-time buyers through programs like Fannie Mae HomeReady or Freddie Mac Home Possible. Private mortgage insurance applies with less than 20% down and can often be removed later. Some buyers pair a conventional loan with ADFA down payment assistance through a participating lender. Check lender-specific requirements.

Little Rock factors that affect your choice

• Price points and program caps: Your purchase price must fit both the loan type and any ADFA limits if you plan to use state assistance. Conforming loan limits and FHA county limits update annually. Confirm Pulaski County’s current caps before you shop.
• USDA eligibility within metro Little Rock: USDA is location specific. Many central Little Rock neighborhoods are not USDA-eligible. Some addresses in less dense parts of Pulaski County may qualify. Always verify at the property level using the USDA map.
• ADFA-approved lenders: If you want ADFA down payment help, you must use a participating lender. Ask any lender if they are ADFA-approved and how many ADFA loans they close each year.
• Homebuyer education: ADFA assistance often requires an approved homebuyer education course. Plan time to complete it before closing if your program requires it.
• Lender overlays: Beyond federal program rules, many Little Rock lenders apply their own credit score minimums, debt-to-income caps, and documentation standards. It is smart to compare at least two lenders.

What your down payment could look like

Below are sample scenarios based on common first-time buyer loan rules. These are for illustration only. Interest rates, program fees, taxes, insurance, and mortgage insurance are not included unless noted. Always confirm a detailed Loan Estimate with your lender.

Assumptions

• Rate example: 6.0% on a 30-year fixed for principal and interest only. Your rate will vary.
• Mortgage insurance, taxes, homeowner’s insurance, HOA dues, and program fees are not included in the monthly examples below and can change the totals.

Sample price A: $150,000

• FHA at 3.5% down: $5,250 down. Estimated base loan: $144,750 before FHA upfront MIP.
• Conventional at 5% down: $7,500 down. Estimated base loan: $142,500.
• VA or USDA at 0% down: $0 down. Estimated base loan: $150,000 before any funding or guarantee fees.

Sample price B: $225,000

• FHA at 3.5% down: $7,875 down.
• Conventional at 5% down: $11,250 down.
• VA or USDA at 0% down: $0 down.

Sample price C: $350,000

• FHA at 3.5% down: $12,250 down.
• Conventional at 5% down: $17,500 down.
• VA or USDA at 0% down: $0 down.

Approximate monthly principal and interest at 6.0% (Price B example, 30-year fixed)

• FHA at 3.5% down: About $1,300 per month on roughly $217,125 base loan.
• Conventional at 5% down: About $1,283 per month on roughly $213,750 base loan.
• VA or USDA at 0% down: About $1,349 per month on $225,000 base loan.

Key cost notes

• FHA adds both an upfront and monthly mortgage insurance premium. The upfront amount can be financed, which increases the loan balance.
• Conventional loans with less than 20% down require private mortgage insurance. PMI pricing varies by credit score and down payment.
• VA has no monthly mortgage insurance. A one-time funding fee applies unless you are exempt.
• USDA charges an upfront guarantee fee and a modest annual fee that spreads across monthly payments.
• Cash to close includes closing costs in addition to your down payment. Some programs and loans allow seller concessions within limits. Ask your lender for a full cash-to-close estimate.

How to choose the right lender in Pulaski County

Look for a lender who closes the specific program you plan to use and understands local requirements.

• If using ADFA: Confirm the lender is on the ADFA participating list and ask how many ADFA loans they closed in the last year.
• If exploring USDA: Verify that the lender regularly closes USDA loans and can help you check property eligibility quickly.
• If using VA: Ask for a loan officer who specializes in VA and can help obtain your Certificate of Eligibility early.
• If using FHA or conventional with DPA: Confirm the lender is comfortable packaging DPA and explain any additional underwriting steps or timeline.

Questions to ask lenders

• Are you an ADFA-participating lender for down payment assistance?
• Do you routinely close FHA, VA, or USDA loans in Pulaski County?
• What minimum credit score and debt-to-income ratio do you require for this program?
• What are your current rate estimates and total lender fees for my scenario? Can you provide a written Loan Estimate?
• How long is your rate lock, and do you offer a float-down option?
• Can you estimate my cash to close and explain whether ADFA assistance or seller concessions can cover part of my closing costs?
• Do you have any overlays beyond the program’s minimum standards?

Step-by-step: your path to keys

1. Confirm basic eligibility

• VA: Service history and Certificate of Eligibility.
• USDA: Property address must be eligible and household income must meet county limits.
• ADFA: Program income and purchase price limits, first-time buyer definitions, and education requirements as applicable.

2. Gather documents

• Recent pay stubs, W-2s, tax returns, bank statements, government-issued ID, and Social Security number. Your lender may ask for additional items.

3. Get pre-approved in writing

• Ask for a full pre-approval, not just a pre-qualification. If using ADFA, verify the lender is approved and understands the assistance you want.

4. Complete any required homebuyer education

• If your ADFA assistance or other program requires a course, finish it early. Save your completion certificate for underwriting.

5. Shop within program parameters

• Confirm property eligibility for USDA, FHA condo approvals when relevant, ADFA price caps if using assistance, and any other limits.

6. Make your offer and complete underwriting

• Your lender orders the appraisal, you complete inspections, and underwriting works through conditions. USDA, VA, and DPA can add steps, so build in time.

7. Close and move in

• Sign final documents, fund, and get your keys. Most programs require owner occupancy, so plan to move in as scheduled.

Common mistakes to avoid

• Skipping pre-approval: It is harder to shop and negotiate without a clear budget and written letter.
• Overlooking lender overlays: You may qualify under program rules, but a specific lender might have tighter standards.
• Ignoring USDA maps: In-town Little Rock homes often do not qualify for USDA. Always check addresses.
• Underestimating closing costs: Even with zero down, you still need to plan for closing costs unless covered by credits.
• Delaying homebuyer education: If your assistance requires it, complete the course early to avoid last-minute delays.

Helpful official resources

• Explore current assistance and participating lenders through the ADFA homebuyer programs.
• Review FHA loan basics and insurance rules on HUD’s Single Family Housing pages.
• Learn about the VA funding fee and closing costs.
• Check the USDA Guaranteed Loan program overview and verify addresses on the USDA property eligibility map.
• Compare mortgage types with the CFPB loan options guide.

Ready to buy in Little Rock?

You do not have to figure this out alone. A clear plan, the right lender, and the right program can save you time and money. If you want local guidance from search to closing, reach out to Unknown Company to schedule a free consultation. We can help you map your options, connect with program-savvy lenders, and set up a custom home search in Pulaski County.

FAQs

What is ADFA and how does it help first-time buyers in Arkansas?

• ADFA partners with local lenders to offer fixed-rate loans and down payment assistance. Some products have income or price limits and may require homebuyer education.

How do FHA loans work for Little Rock first-time buyers?

• FHA allows 3.5% down with a 580+ score and includes upfront and monthly mortgage insurance. The property must meet FHA standards and you must qualify with lender underwriting.

Can I buy with zero down in Pulaski County?

• Yes, if you qualify for VA or for USDA in an eligible area and under income limits. Zero down does not remove closing costs, so plan for those unless covered by credits.

How do I know if a Little Rock address is USDA-eligible?

• Use the USDA property eligibility map to check each address. Many central Little Rock locations are not eligible, while some outlying areas may be.

Can I combine ADFA assistance with FHA, VA, or USDA loans?

• Often yes. ADFA assistance is delivered through participating lenders who also offer FHA, VA, USDA, or conventional loans. Confirm compatibility and terms with your lender.

What credit score do I need to qualify as a first-time buyer?

• FHA permits 580 for 3.5% down and can allow 500–579 with 10% down. VA and USDA do not set a statutory minimum, but many lenders look for 620 or higher. Lender overlays vary.

How much cash do I need at closing if I use zero-down financing?

• You still need to cover closing costs unless credits or assistance apply. Ask your lender for a Cash to Close estimate and whether seller concessions are allowed under your program.