What is the Arkansas Dream Down Payment Initiative (ADDI)?
The Arkansas Dream Down Payment Initiative (ADDI) is a program designed to assist low-income, first-time homebuyers in Arkansas by providing forgivable loans to help cover down payment and closing costs. This initiative aims to make homeownership more accessible for individuals and families who may struggle with upfront expenses.
How much assistance can I receive through ADDI?
Eligible applicants can receive up to 10% of the home's purchase price, with a maximum of $10,000, to be used toward down payment and closing costs. This assistance is provided as a forgivable, soft second mortgage.
What are the eligibility requirements for ADDI?
To qualify for ADDI, applicants must be first-time homebuyers, defined as individuals who have not owned a home in the past three years. Additionally, applicants must meet income requirements, with household income not exceeding 80% of the area median income (AMI) for their location.
Is homebuyer education required for ADDI participants?
Yes, all applicants are required to complete a homebuyer education course through an approved agency. This education ensures that buyers are well-prepared for the responsibilities of homeownership and understand the mortgage process.
How is the ADDI assistance structured?
The assistance is provided as a forgivable, soft second mortgage with no monthly payments and a 0% interest rate. The loan is forgiven over a period of five years, provided the homeowner continues to own and occupy the property as their primary residence.
What types of properties are eligible under ADDI?
Eligible properties include single-family homes, condominiums, and townhouses located within the state of Arkansas. The property must serve as the borrower's primary residence.
Are there purchase price limits for homes under ADDI?
Yes, the program imposes purchase price limits that vary by county and are subject to change. It's important to verify the current limits applicable to your desired property's location.
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Get Started NowCan ADDI be combined with other assistance programs?
Yes, ADDI can be combined with other assistance programs, such as the ADFA Move-Up Loan Program, to further support homebuyers in meeting their financial needs.
What happens if I sell or refinance my home within the five-year forgiveness period?
If you sell or refinance your home within the five-year period, you may be required to repay a prorated portion of the assistance received. The amount due will depend on the length of time you have owned and occupied the home.
Is there a minimum credit score requirement for ADDI?
While ADDI itself does not specify a minimum credit score, individual lenders may have their own credit requirements. It's advisable to consult with an approved lender to understand their criteria.
Are there any fees associated with participating in ADDI?
Standard loan fees apply, including origination and closing costs. It's important to discuss all potential fees with your lender to understand the total cost of purchasing your home under this program.
How do I apply for the ADDI program?
To apply, contact an ADFA-approved lender who will guide you through the application process, including verifying eligibility, assisting with necessary documentation, and explaining program requirements.
Is there a deadline to apply for ADDI?
There is no specific deadline to apply for ADDI. However, program availability is subject to funding, so it's advisable to begin the application process as soon as you are ready to purchase a home.
Can I use ADDI assistance for new construction homes?
Yes, newly constructed homes are eligible, provided they meet the program's property requirements and purchase price limits.
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The program details do not specify eligibility for manufactured homes. Prospective buyers should verify property eligibility with an approved lender.
What is the process for loan forgiveness under ADDI?
The loan is forgiven over a five-year period in equal, annual installments, as long as the homebuyer continues to own and occupy the property as their primary residence.
Are there occupancy requirements for ADDI?
Yes, homeowners must occupy the property as their primary residence for the duration of the five-year forgiveness period. Renting out the property or using it as a secondary residence may violate program terms and could result in the requirement to repay the assistance.
Can I rent out a portion of my home if I receive ADDI assistance?
No, the property must be occupied entirely as your primary residence. Renting out any portion of the home may violate program terms and could result in the requirement to repay the assistance.
Does ADDI have a recapture tax?
The program details do not specify a recapture tax. However, it's advisable to consult with a tax professional to understand any potential tax implications.
How long does the ADDI application process take?
The timeline can vary based on individual circumstances and lender processing times. It's advisable to begin the application process early to ensure timely approval and to address any potential issues that may arise.