Move-Up Choice First-Time Homebuyer Assistance Programs

Move-Up Choice: Arkansas’ Gateway to Affordable Homeownership

You’ve crunched the numbers, stalked listings, and dreamt about backyard barbecues—yet the down payment still feels like a mountain. Enter Move-Up Choice, Arkansas’ flagship program delivering down payment assistance and competitive interest rates that shrink that mountain to a molehill.

In this in-depth guide, we unpack every facet of Move-Up Choice (sometimes called the Move-Up Choice loan or Arkansas Move-Up Choice). You’ll discover eligibility rules, fine-print nuances, insider tips, and a quick success story—all crafted to help first-time buyers grab the keys with confidence.

What Is Move-Up Choice & Why Does Arkansas Swear by It?

Launched by the Arkansas Development Finance Authority (ADFA), Move-Up Choice pairs a 30-year fixed-rate mortgage with up to 4% in down payment assistance (DPA). Unlike many grants, the DPA arrives as a soft second mortgage—no payments, zero interest, and forgiveness after ten healthy years of occupancy.

• Loan types: FHA, USDA, VA, or conventional options via Fannie Mae’s HFA Preferred®.
• Interest rate cushion: ADFA negotiates below-market rates, saving Arkansans roughly $80–$120 a month on a $200,000 loan, according to internal 2023 rate sheets.
• Geographic reach: Available statewide, from Bentonville’s tech hub to Helena’s bluesy riverfront.

Think of Move-Up Choice as a financial trampoline: it launches buyers over the biggest hurdle—cash at closing—while dampening monthly payments for decades.

How Does the Move-Up Choice Program Work in Practice?

The mechanics are surprisingly simple:

1. Pre-approval. Work with an ADFA-approved lender to lock in the Move-Up Choice rate.
2. Layer the assistance. Choose 4% of the first mortgage amount for your DPA, applied toward down payment, closing costs, or prepaid items (taxes & insurance).
3. Sign once, benefit twice. At closing, you’ll execute two notes: the primary 30-year and the silent second. Live in the home 10 years and the second magically disappears.
4. Optional add-ons. Pair Move-Up Choice with ADFA’s Mortgage Credit Certificate (MCC) to trim up to $2,000 from your federal tax bill every year.

By blending these layers, a buyer who has $1,500 in savings could realistically purchase a $175,000 starter home with as little as $500 out of pocket. That’s not marketing bravado—it’s math.

Eligibility Requirements for Move-Up Choice

Eligibility sounds daunting, but most working Arkansans qualify. Below are the current benchmarks (verify with your lender, as limits shift annually):

1. Income Limits

Household income must sit below $137,280 in high-cost counties (Benton, Madison, Pulaski, Washington) and $115,560 statewide. These figures hover around 115% of the area median income, giving solid headroom for middle-class earners.

2. Purchase Price Caps

Homes up to $381,308 in targeted counties and $311,980 elsewhere qualify—generous enough to snag a new-construction three-bed in Conway or a vintage charmer in Hot Springs.

3. Credit Score & DTI

• Credit: 640 for FHA/USDA, 660 for conventional.
• Debt-to-Income: 45% max (FHA/Conventional), 41% guideline for USDA.

4. Occupancy & Education

• Must be your primary residence.
• Complete a HUD-approved homebuyer course—often free online.
• Not limited to first-time buyers; repeat owners may apply, making the “Move-Up” moniker literal.

How Much Down Payment Assistance Can I Get with Move-Up Choice?

Arkansas structures support as a second mortgage worth exactly 4% of the first mortgage. On a $250,000 FHA loan, that equals $10,000. Funds hit the closing table the same day, covering:

• FHA’s 3.5% minimum down payment
• Title work, appraisal, and lender fees
• Prepaid taxes and insurance escrows

Result? Many borrowers receive a rebate check of a few hundred dollars at closing—money that can outfit the fridge or seed an emergency fund.

Micro-Story: How a Little Rock Teacher Locked in Her Dream Bungalow

Meet Tia N., a fifth-grade teacher making $48,500. With $2,000 in her savings account, she typed “help for Arkansas first-time buyers” into Google at 2 a.m.—grading papers turned into house hunting. One lender pitched her a 6.75% FHA loan, but she balked at the $8,000 down payment.

A colleague whispered, “Try Move-Up Choice.” Two weeks later, Tia closed on a $190,000 1940s bungalow in Hillcrest. The program’s 4% DPA slashed her cash-to-close to $1,150, and the ADFA-negotiated rate dropped to 6.05%. Tia’s new monthly payment? $1,297, roughly $200 less than her rent. She now hosts Sunday potlucks where former renters marvel at her oak crown molding.

Can Move-Up Choice Combine with FHA, VA, or USDA Loans? (Yes—Here’s How)

Most assistance programs pigeonhole you into a single loan type. Move-Up Choice breaks that mold by letting you pair its 4% DPA with four mainstream mortgages:

The takeaway: choose the primary loan that suits your income and credit, then layer Move-Up Choice on top for extra leverage.

Other People Also Ask

We’ve covered the heavy hitters above. Below, rapid-fire answers keep you on track.

FAQ

• What credit score is needed for Move-Up Choice?
  Minimum 640 for FHA/USDA, 660 for conventional, and satisfactory VA guidelines.
• Is Move-Up Choice only for first-time buyers?
  No. Repeat buyers are welcome if the new home will be their primary residence.
• How do I apply?
  Contact an ADFA-approved lender and complete a HUD-approved homebuyer course before locking your rate.
• What happens if I sell before 10 years?
  A prorated portion of the DPA second mortgage becomes due at sale or refinance.

Pro Tips to Maximize Your Move-Up Choice Benefits

• Shop lenders. Rates can vary up to 0.375% even within the ADFA network.
• Stack incentives. Some Arkansas cities—like Fort Smith and Pine Bluff—offer local grants you can layer on top of Move-Up Choice.
• Plan the 10-year horizon. If you expect to move, consider saving the DPA amount in advance, just in case you sell early.
• Leverage the MCC. The Mortgage Credit Certificate can shave $125–$166 off your monthly federal withholding, effectively lowering your payment.

Stat Snapshot: Arkansas Housing Trends in 2024

Data from the Arkansas Realtors® Association shows median home prices rising 5.8% year-over-year, while average 30-year rates hover near 6.7%. Programs like Move-Up Choice help offset these twin headwinds by dropping effective rates below national averages. In fact, ADFA reports that Move-Up Choice participants saved a cumulative $14.2 million in interest costs last fiscal year.

Your Path Forward

Homeownership need not remain a Pinterest board fantasy. With Move-Up Choice, Arkansas gives everyday residents—from nurses in Jonesboro to warehouse workers in Texarkana—a pragmatic toolkit for crossing the threshold into their own homes.

Ready to crunch your personal numbers? Click below to match with an ADFA-approved lender, receive a complimentary affordability check, and see precisely how much down payment help you’ll earn.

Article by an independent real-estate writer; data current as of July 2024. Always verify figures with an ADFA-approved lender.