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REVISED 6/10/2020 ADFA
ARKANSAS DEVELOPMENT FINANCE AUTHORITY
HOMEOWNERSHIP DIVISION
PROGRAM GUIDELINES
• ADFA Move-Up
• Down Payment Assistance (DPA)
• Arkansas Dream Down-payment Initiative (ADDI)
• Mortgage Credit Certificate (MCC)
Eligible Property Types
• Single Family Detached
• Planned United Developments (PUDs): Townhomes or Condos
• Manufactured Housing: allowed only on government loan products
(FHA, VA, USDA)
• Duplex: FHA
1 Commerce Way, Suite 602
Little Rock, AR 72202
https://homeloans.arkansas.gov
Like Us on Facebook: ARHomeFinancing
ALL FILES ARE REVIEWED IN THE ORDER THEY ARE RECEIVED
REVISED 6/10/2020 2 ADFA
INDEX
First Mortgage Programs Page
Move-Up 3
Second Mortgage Programs
Arkansas Dream Down-payment Initiative (ADDI) 9
Down Payment Assistance (DPA) 12
MCC
Mortgage Credit Certificate (MCC) 13
Income Limits
Mortgage Credit Certificate (MCC) 16
Arkansas Dream Down-payment Initiative (ADDI) 18
Freddie Mac 20
Resources
Contact Information 22
ARKANSAS DEVELOPMENT
FINANCE AUTHORITY HOMEOWNERSHIP DIVISION
REVISED 6/10/2020 3 ADFA
PROGRAM GUIDELINES
Product Information ADFA “Move Up” 1st Mortgage:
Conventional Loan, Freddie Mac HFA Advantage :
• Two Conventional Loan Options, See page 4
• Fixed Rate / 30 Year Amortization / Purchase Only (Available as Stand-Alone)
• Arkansas Conventional Conforming Loan Limit
Government Loans (VA, RD, FHA):
• Fixed Rate / 30 Year Amortization / Purchase Only (Available as Stand-Alone)
• Follow each specific program guidelines: VA, RD, and FHA
• Follow All Conforming Loan Limits for each program
Master Server ServiSolutions— A Division of the Alabama Housing Finance Authority:
In Alabama: 334.244.9200 Toll-free: 800.325.2432 FAX: 334.244.9214
Borrowers must qualify for the 1st Mortgage “Move Up” in order to use ADDI or DPA.
ADDI and DPA are not available independently without ADFA “Move-Up” 1st Mortgage.
Conventional Loans:
• Freddie Mac HFA Advantage Conventional (only)
Borrower (s) must not have an ownership interest in more than two financed residen-
tial properties, including the subject property, as of the Note Date.
Bulletin: September 16, 2019.
• Primary Residence only. (Available as Stand-Alone without down-payment assistance)
Eligible Borrower
Governmental Loans:
• Follow each specific program guidelines: VA, RD, and FHA.
• Primary Residence only. (Available as Stand-Alone without down-payment assistance)
NEW! Rate Lock /
Extension Fees
All Loan Reservations must be reserved and closed within 30-Days.
• Lenders must complete the expected closing date on the reservation system, and upload a closing package due within 50-Days of reservation or subject to cancellation.
• 60– Day Rate Lock timeline
• Extension Policy: you only pay the fee if the loan closes, and are able to extend loans for 7,
15, 22, or 30 days at prorated prices that will be netted out at purchase.
Rate is set daily and sent to all participating lenders. Rate subject to change without notice.
First-Time Homebuyer • No first-time homebuyer requirement for MOVE-UP, 1st Mortgage Loan.
• When combined with any ADFA down-payment assistance other requirements may apply.
See ADFA Mortgage Credit Certificate Programs for additional information.
Income Limits ADFA Move-Up, ALL 1st Mortgage Loans— Borrower (s) or Co-Borrower (s) Qualifying In-
come* Limit Maximum of $137,000. Effective February24, 2020.
Secondary Market, 1st Mortgage Loan
7460 Halcyon Pointe Drive, Suite 200
Montgomery, AL 36117 P.O. Box 242967
Montgomery, AL 36124-2967
*Income other than base pay does not need to be included if the Borrower (s) or Co-Borrower (s) does not choose to have it considered for repaying
the loan.
REVISED 6/10/2020 4 ADFA
PROGRAM GUIDELINES
Secondary Market, 1st Mortgage Loan
Compliance Review
Requirements
HFA Conventional
& Standard
Conventional
Based on Freddie
Mac Income Limits
AIS INCOME SUBSIDY GRANT IS NOT LONG AVAILABLE: Instead, Two HFA Freddie Mac Conventional Products will be available as follows: 1. “Move-Up Conventional AT and Less Than 80% AMI” (HFA Conventional)
• Borrowers qualifying income at or below 80% AMI
• Lower Interest Rate
• Allow minimum MI coverage (chartered)
• Freddie Mac Home Possible Income Eligibility Tool: Lender must Include a screenshot/print screen showing the property address and income limits. (This serves as a proof that the Lender checked the borrower’s eligibility for this program).
See “ADFA Reservation Pre/Post Closing Presentation” page 76.
Item Included & required in Move-Up Post Closing Checklist.
2. “Move-Up Conventional Greater Than 80% AMI” (Standard Conventional)
• Borrowers qualifying income above 80% AMI
• Slightly Higher Interest Rate
• Standard Mortgage Insurance required. See, Section 4701
ADFA MUST BE NOTIFIED PRIOR TO CLOSING of any reservations made for At or less than 80% AMI, but discovered to be greater than 80% — the rate will be changed to the greater than 80% AMI rate as of the day it was reserved. If ADFA is not notified and the loan closes at the lower rate the loan will be ineligible for purchase by ServiSolutions due to the difference in the MI coverage.
MCC Eligible Yes, MCC may be paired with Move-Up, even if 1st mortgage is not paired with any down-payment
assistance program. See ADFA Mortgage Credit Certificate Programs, for additional information.
Maximum Loan-To-
Value (LTV) & Total-
Loan-To-Value
(TLTV)
Governmental Loans:
Follow each Program Guidelines for specific Maximum Loan-to-Value & Total-Loan-To-Value
Conventional Loans:
All Freddie Mac HFA
Advantage
Minimum Median
Credit Score
• All applicants are subject to Credit Score requirements, including Non-Occupant Borrowers Co-
Signers.
• One credit score suffices if it meets the minimum score requirement.
Pre-Closing Compliance package: ADDI and MCC
Due by 15-Day from Lock Rate/Reservation
Post-Closing Compliance (closing) package:
MOVE-UP, ADDI, DPA, and MCC Due by 50-Day from Lock Rate/Reservation
Maximum LTV Ratio Maximum TLTV Ratio
97 % 105%
FHA VA RD HFA Advantage Conventional
Credit Score 640 640 640 640
REVISED 6/10/2020 5 ADFA
PROGRAM GUIDELINES
Debt-To-Income Ratio
Maximum (DTI)
Homebuyer Education • Freddie Mac HFA Advantage Conventional Loans if both borrowers are first time homebuy-
ers, at least one borrower is required to take the course.
Follow Specific product guidelines for other 1st Mortgages: VA, FHA, RD.
Credit Smart is acceptable to meet Freddie Mac education requirement for the 1st
Mortgage requirement. For more information, if using ADDI HBE Course require-
ments, see under ADDI Page 9.
Eligible Purpose • Single family detached , 1-Unit Primary Residence, and PUDs (Condos & Townhomes).
• VA, FHA, RD or Freddie Mac HFA Advantage Conventional loans types allowed.
• Manufacturing housing allowed only on government loan products (FHA, VA, USDA).
• Duplex allowed on FHA loans, follow FHA program guidelines.
See Eligible Borrower section on page 3 for additional information.
Non-Occupant
Borrowers
Co-Signers
• Non-Occupant borrowers Co-Signers allowed only on FHA Loans.
• Co-Signers must sign the Note, and TRID Documents only. Cannot take title or be on the
Warranty Deed.
• ADFA does not request income documents on the Co-Signer.
• Non-Occupant borrowers Co-Signers must meet credit score guideline as well.
Manufactured Housing
Manufactured housing is allowed under each agency guidelines, and subject to the State of
Arkansas. The following guidelines apply:
Required Lien Perfection Documentation
• Collection of a DFA retirement confirmation document: Confirmation Letter from the AR
Department of Finance & Administration stating the mobile home certificate of title has
been cancelled.
Secondary Market, 1st Mortgage Loan
Minimum Credit Score Maximum DTI Maximum LTV Maximum CLTV
640: VA, RD, FHA 45% Per FHA Program Guidelines
State of Arkansas Manufactured
Housing Requirements
ServiSolutions Loan Delivery &
Purchase Guidelines, page 34
See Manufactured Housing Requirements for each program.
FHA VA RD HFA Advantage Conventional
DTI 45.000% 45.000% 45.000% 45.000%
• Debt-To-Income ratio, including DPA 2nd Mortgage
payment, must not exceed 45%.
REVISED 6/10/2020 6 ADFA
PROCEDURES Lock-In ALL program reservations and rate Lock-Ins are from 9:00 am to 7:00 pm, Monday– Friday
with exception of ADFA holidays. https://adfa.mitas.com/mitas/
Income Verification Move-Up, Income Limit Maximum of $137,000. Effective February24, 2020.
Employed—ADFA asks for the Verification of Employment (VOE), last 2 paystubs (continuous
30 days), and the Loan Approval (AUS).
Self-employed—ADFA requires last 2 years signed tax documents, 1099’s, and a self-
prepared signed YTD P&L.
Discount Points Not Allowed
UPDATED! Reservations ALL program reservations are from 9:00 am to 7:00 pm
May be reserved or ‘locked’ at application in our Reservation System, keep in mind the follow-
ing:
• If ADFA has not received a Compliance ADDI or MCC File within 15 days from res-
ervation/lock date the reservation will automatically be cancelled. Once a Compli-
ance File is received, ADFA will issue a conditional commitment to the lender. DPA’s will
remain the same as before.
• Closing Package reviewed by ADFA:
If ADFA has not received a Closing Package within 50 days from reserva-
tion/lock date, the reservation will automatically be cancelled.
Documents are required to be uploaded using MITAS as a whole package with
separated Index Sheets (preferred), or individually upload without Index sheets.
**See pages 21-32 from New Reservation Presentation
Underwriting • HFA Advantage Conventional through Loan Product Advisor (LPA) “ACCEPT/ELIGIBLE”
recommendation is required. LPA A Minus Offering is not allowed.
• VA, FHA through DU “APPROVE/ELIGIBLE” recommendation.
• RD through GUS.
**For ALL Loans Manual Underwriting is not allowed**
Delivery Fees SERVISOLUTIONS FEES
• $200—Funding Fee. This fee is paid directly by the lender and net funded at time of loan
purchase. It is not to be charged to the borrower.
• $71.50—Tax Servicing Fee
ADFA FEES
• ADFA pays 1.75% SRP on All loans when sold to the Master Servicer.
• OPTIONAL: Lenders are allowed to charge up to a 1% Origination Fee
Secondary Market, 1st Mortgage Loan
REVISED 6/10/2020 7 ADFA
PROCEDURES Funding
Originating lender will fund the 1st and 2nd mortgage, at closing.
Points & Fees
ADFA is exempt from ATR-QM (Ability to Repay and Qualified Mortgage Rule).
UPDATED! Delivery • 60—Day purchase timeline from date loan is reserved or ‘locked’ in our Reservation Sys-
tem.
If ADFA has not received a closing package, “Extension Policy” will be available
pertaining to lock-in/reservations where you only pay the fee if the loan is pur-
chased. To further benefit from this change, extensions are now available for 7,
15, 22, or 30 days.
• ServiSolutions will not purchase after 70-days of closing and will send back to
Lender.
HFA Conventional
Mortgage Insurance
1. HFA Conventional At and Less than 80% AMI:
Freddie Mac HFA Advantage Conventional monthly mortgage insurance automatically
ends when LTV drops to 78%. Single Premium, available, coverage is Life of Loan with
no additional cost.
Single Premium Mortgage Insurance is allowed, it can be paid by the borrower,
Lender or Seller. If it is paid by the Lender or Seller it must be included in the maxi-
mum interested party contribution of 3% of the sales price.
Follow Freddie Mac Income Limits
2. HFA Conventional Greater than 80% AMI:
Standard Mortgage Insurance required. See, Section 4701
Post-Closing Documents Standard post-closing documents must be uploaded to ADFA by the MITAS Portal.
Original Recorded Documents must be submitted to ServiSolutions.
Loan Delivery &
Purchase Guidelines
Link: ServiSolutions Loan Delivery & Purchase Guidelines
Secondary Market, 1st Mortgage Loan
≤ 95% 97%
90.01% to 95% = 16%
85.01% to 90% = 12% 18%
80.01% to 85% = 6%
REVISED 6/10/2020 8 ADFA
PROCEDURES
ADFA Training
Resources
Arkansas Development Finance Authority
1 Commerce Way, Suite 602
Little Rock, AR 72202
(501) 682-5900
ADFA Forms, under SINGLE FAMILY
ADFA OUTREACH TEAM:
Miscellaneous The information contained herein (including but not limited to any description of ADFA pro-
grams and products, eligibility criteria, interest rates, fees and all other loan terms) is subject
to change without notice. Participants are responsible to find the latest information and
guidelines.
(The information contained in this product description does not modify, replace or substitute
information in the Freddie Mac Selling and Loan Product Advisor Guides and or related re-
lease notes or supplements. Always check for Freddie Mac, ServiSolutions or ADFA an-
nouncements and updates for current underwriting guidelines, changes and/or updates).
Secondary Market, 1st Mortgage Loan
Tim Wooldridge—Director of Outreach
Northeast Arkansas
(870) 926-8758
Kyle Putman—Outreach Specialist
Northwest Arkansas
(501) 551-1276
Issac Morales—Outreach Specialist
Central & South Arkansas
(501) 765-6543
Derrick Rose—Marketing & Outreach
Little Rock
(501) 682-5904 [email protected]
REVISED 6/10/2020 9 ADFA
PROGRAM GUIDELINES ADDI Affordable Soft 2nd Mortgage: 5-year term, pro-rated, forgiven at 1/60th per month.
• Borrowers may be able to receive 10% of purchase price, up to $10,000.
• Can receive cash back at closing for POC items.
• Can not be used for repairs, principal reduction, or to pay debt to qualify.
• ADDI is not eligible for refinancing.
• MCC Eligible and may be paired in assistance with ADDI. Follow MCC restrictions.
• ADDI cannot be combined with DPA.
Eligible Borrower ***Borrowers must qualify for the 1st Mortgage “Move Up” in order to use ADDI.***
• Purchase must be used as Primary Residency.
• ADDI must be approved by ADFA prior to closing.
First-Time Homebuyer • No first-time homebuyer requirement for ADDI.
See ADFA Mortgage Credit Certificate Programs for additional information.
Rate
Not applicable.
Homebuyer Education • All borrowers must take a HUD approved 8 hour pre-purchase homebuyer education class
or an e-home online course through a HUD-Approved homebuyer counseling agency as
well.
• Homebuyer Education Course class must be done prior to closing.
Online, 50% OFF, self-paced course link below: HUD-Approved Homebuyer Education Online Course
Income Limits Household income limits apply by 80% Area Medium Income or below by county:
HUD HOME Program Income Limits.
Eligible Purpose • Single family detached , 1-Unit Primary Residence, and PUDs (Condos & Townhomes).
• VA, FHA, RD or Freddie Mac HFA Advantage Conventional loans types allowed.
• Manufacturing housing allowed on FHA, VA or RD Loans.
• Borrower (s) can own other property.
Purchase Price / Sales
Price
ADDI—Purchase Price Limit of $250,000
Forgivable 2nd Soft/Silent Mortgage Loan
ADDI cannot be used for principal reduction; but it can used for up to 5% down-
payment on a Conventional, and up to 3.5% on FHA, plus closing cost & POC items.
On VA / RD, ADDI may only be used for closing cost & POC items, no additional
down-payment.
REVISED 6/10/2020 10 ADFA
PROGRAM GUIDELINES Non-Occupant
Borrowers
Co-Signers
• Non-Occupant Co-Signers allowed only on FHA Loans.
• Co-Signers must sign the Note, and TRID Documents only. Cannot take title or be on the
Warranty Deed.
• ADFA does not request income documents on the Co-Signer.
• Non-Occupant Co-Signers must meet credit score guidelines as well.
Tax Returns Employed—ADFA requires the most current year of signed 1040’s and W2’s. If 1040 is not
available, Lender must provide an IRS Transcript for that year. If W2’s are not available, Lender
must provide an IRS RECORD OF ACCOUNT.
Self-Employed—ADFA requires last 2 years signed tax documents, W-2/1099’s and a self-
prepared, signed YTD P&L.
Income Verification • Verification of Employment (VOE).
• Most recent, continuous 30-days, Pay-Stubs.
CHILD SUPPORT: Provide proof of the amount of child support rec'd for each child.
• You may email your inquiry form, with the borrower's name and SS#, to ARKANSAS CHILD SUPPORT ENFORCEMENT at:
[email protected] OR [email protected]
• Send ADFA the e-mail you sent to AR CHILD SUPPORT ENFORCEMENT, together with their response. If there is child support, need proof of the monthly amount rec’d by the bor-rower. This can be documented by a twelve month printout or a recent court order agree-ment.
Fees • ADFA allows a $50 lender application fee to borrower, not required.
• Borrowers are able to receive cash back at closing to cover POC items.
• ADFA pays for up to two HQS Inspections. Any additional inspections cannot be paid by
the borrower, and will not be paid by ADFA.
Borrower is not allow to be charged for ADDI HQS Inspections.
Awards Letters • Compliance package submission required prior to closing.
Awards letter sent prior to closing ([email protected])
Funding
Originating lender will fund the 1st mortgage and 2nd mortgage at closing.
Forgivable 2nd Soft/Silent Mortgage Loan
Tax Returns: Yes, for ADDI you do need signed tax returns, together with
W2’s, from anyone 18 or older who will live in the house.
REVISED 6/10/2020 11 ADFA
PROGRAM GUIDELINES HQS Inspection • U.S. Department of Housing & Urban Development requires Housing Quality Standards
Inspection.
• Lender is allowed to pick its own inspector (Business License & W-9 must be approved
prior selection of your own inspector).
• ADFA pays for Initial & Final Inspection, with a maximum of two inspections (up to $125 +
mileage for each inspection).
• ADFA must dispatch inspectors in order to pay them.
• Compliance File must be approved by ADFA prior to ordering HQS Inspection
When using ADDI, please allow up to 45 days for closing. See ADFA ADDI
Miscellaneous The information contained herein (including but not limited to any description of ADFA pro-
grams and products, eligibility criteria, interest rates, fees and all other loan terms) is subject
to change without notice. Participants are responsible to find the latest information and
guidelines.
(The information contained in this product description does not modify, replace or substitute
information in the Freddie Mac Selling and Loan Product Advisor Guides and or related re-
lease notes or supplements. Always check for Freddie Mac, ServiSolutions or ADFA an-
nouncements and updates for current underwriting guidelines, changes and/or updates).
Forgivable 2nd Soft/Silent Mortgage Loan
Files are reviewed in the order they are received.
REVISED 6/10/2020 12 ADFA
PROGRAM GUIDELINES
DPA Affordable 2nd Mortgage (repayable): 10-year amortization term.
• Borrowers are able to receive from $1,000 up to $10,000 for down payment assistance,
closing cost, cash back at closing for POC items, and up to $100.
• Cannot be used for repairs or to pay debt to qualify.
• Borrowers may increase down payment thus reducing 1st Mortgage amount.
• No penalty for pre-payment.
• DPA is not available for refinance.
• MCC may be paired in assistance with DPA. Follow MCC guidelines
• DPA cannot be combined with ADDI.
• DPA is not available independently without ADFA “Move-Up” 1st Mortgage.
Eligible Borrower ***Borrowers must qualify for the 1st Mortgage “Move Up” in order to use DPA.***
• Purchase must be used as Primary Residency
First-Time Homebuyer
No first-time homebuyer requirement for DPA, 2nd Mortgage Loan
Rate
Matches 1st Mortgage Rate (ADFA Move-Up).
Homebuyer Education • DPA, itself, does not have an education course requirement, unless matched with an HFA
Conventional and both borrowers are first time homebuyers, then Freddie Mac Credit
Smart course is required.
Income Limits
No Income Limits for DPA, but borrower is subject to the 1st Mortgage Loans:
Borrower’s Qualifying Income Limit Maximum of $137,000
Tax Returns
DPA—have no income limits, ADFA does not require any Tax Information.
Income Verification
No income verification required for DPA, 2nd Mortgage.
HQS Inspection
No HQS Inspection required for DPA.
Fees • ADFA allows a $50 lender application fee to borrower, not required.
• Borrowers are able to receive cash back at closing to cover POC items.
Pre-Closing • Compliance submission package not required.
• Awards letter sent prior to closing ([email protected])
Funding
Originating lender will fund the 1st mortgage and 2nd mortgage at closing.
Repayable 2nd Mortgage Loan
REVISED 6/10/2020 13 ADFA
PROGRAM GUIDELINES Term Credit may be claimed for the life of the loan, as long as the home is used as primary residence.
Purpose The Mortgage Credit Certificate was authorized by congress in 1984 Tax Reform Act to help
lower-income families afford a home. The program allows homebuyers to claim a dollar-for-
dollar tax credit for a portion of mortgage interest paid per year, up to $2,000.
The certificate is issued by ADFA and allows qualifying homebuyers to claim a tax credit of up
to 50% of the mortgage interest paid per year.
Amount Up to 50% of mortgage interest up to $2,000 tax credit per year that reduces the amount of
federal income tax paid by the borrower, giving more available income to qualify for a mortgage
loan and assist with house payments.
Tax Credit
Advantages Borrower may go to their employer and adjust their W-4’s to reflect the anticipated credit. This
will lower the borrower's federal tax withholdings and increase the monthly take home pay.
$2,000 Tax Credit ÷ 12 = $166.66 monthly results in additional income that can be used for
qualifying purposes.
First-Time Homebuyer First-time homebuyer is defined as a borrower who has NOT had an ownership inter-
est in a principal residence at any time during the three year period prior to the date of
closing.
This ruling applies to a non-borrower spouse or any co-occupant.
Dollar-per-Dollar Tax Credit
Tax credit is equal to
the annual mortgage
interest paid multiplied
by the MCC tax credit
rate of 50%.
REVISED 6/10/2020 14 ADFA
PROGRAM GUIDELINES Qualifications All Borrower (s) and Household Occupants must qualify by one of the following:
1. Must be a first-time homebuyer (No principal residence ownership within last 3 years).
2. Veteran or Spouse of a Veteran.
3. Purchasing a home in a Targeted County.
Targeted County A targeted county is a qualified census tract or an area of chronic economic distress as desig-
nated by the IRS. If property is located in a targeted county, the first time homebuyer require-
ment does not apply.
IRS Filling Form 1040 “U.S. Individual Income Tax Return”— Borrower must claim the tax credit when
filling this form annually.
Form 8396 “Mortgage Interest Credit”— Borrower must use this form to claim this tax cred-
it.
Borrower may itemize if preferred.
Income Limits /
Qualifying Income
Household income limits apply. MCC can be classified as “Other Income”.
If the Borrower (s) have no tax liability, the MCC income cannot be used as qualifying income.
See the ADFA Mortgage Credit Certificate (MCC) Program-Income Limits List.
Maximum Purchase
Price Limit $270,000
Income Verification In non-targeted:
• Last continuous 30-Day pay-stubs, VOE’s, 1 year signed tax return with W-2’s.
• Self-employed borrower (s) requires 2 years signed tax returns, W-2/1099’s and YTD P&L.
Targeted:
• Last continuous 30-Day pay-stubs, and VOE’s
• Self-employed borrower (s) requires 2 years signed tax returns, W-2/1099’s and YTD P&L.
Non-Occupant
Borrowers /
Co-Signers
• Can sign the LE, CD and Note only. Cannot take title or be on the Warranty Deed.
• Can be on the LPA.
• MCC Co-signers are allowed and do not need to meet the first-time homebuyer require-
ment if they are not occupying the property. ADFA does not require income verification
documents from co-signer.
Fees Lender Fee— Lender may charge up to $150 per each MCC transaction.
Issuance Fee—when using a participating lender’s fixed-rate and fully amortizing first mort-
gage .50% (half of one percent) of the loan amount as issuance fee will be charged for MCC.
Payable to ADFA.
ADDI funds may be used for MCC fees. Other fees may apply if combining with any other AD-
FA Products.
Re-Issuance Certificate Fee— $150
Issuance Fee waived on MCC when using / paired with “ADFA Move-Up” 1st Mortgage
Loan.
Issuance Fee waived on MCC when used for Veterans, or Spouse of Veteran Loan (Form
DD214 required).
Dollar-per-Dollar Tax Credit
REVISED 6/10/2020 15 ADFA
PROGRAM GUIDELINES
Recapture Tax For the Recapture Tax to apply, ALL of the following conditions must be met:
I. Home is sold or disposed of within 9 years of being purchased, for reasons other than
death, and
II. There is a capital gain on the sale of the home, and
III. Household income for the year in which you sell your home exceeds at least 5% each year,
which is the federal recapture tax limits.
We estimate that 97% of borrowers will not be subject to the Recapture Tax.
Pre-Closing Documents MCC Conditional Commitment Checklist, Include all items in this list
Exhibit A Notice to Borrower Potential Recapture
Exhibit B Application for Conditional Commitment
Exhibit C Disclosure
Exhibit I Non-Borrower Occupant Income Affidavit (Maybe)
Note: Other Forms might be required
Post-Closing Documents MCC Post Closing Checklist, Include all items in this list
Exhibit E Borrowers Closing Affidavit, Signed date on Exhibit B, and check (a) or (b)
Exhibit F Seller Affidavit, Seller Signs
Exhibit G Lender Closing Certificate, Lender Signs
Exhibit P Determining Recapture Tax
1. Fill in Closing Dates, and type Targeted or Non-Targeted
2. Recapture Calculation = 6.25% X Loan Amount, Same number in all 3 blanks
• County Income Limit, Select corresponding County
**Exhibit P & Country Income Limit go together**
Disclosures MCC CAN’T reduce your Federal Income Tax if you don’t owe any taxes!
ADFA or any associate representing ADFA are not tax professionals and cannot give
tax advice. ADFA recommends that borrowers seek the advice of a qualified tax pro-
fessional when deciding whether or not to take advantage of an MCC. For more infor-
mation regarding this provision, please contact the IRS or consult a tax professional.
ADFA will not reimburse MCC borrower’s that are required to pay the Recapture Tax.
Miscellaneous The information contained herein (including but not limited to any description of ADFA pro-
grams and products, eligibility criteria, interest rates, fees and all other loan terms) is subject
to change without notice. Participants are responsible to find the latest information and
guidelines.
(The information contained in this product description does not modify, replace or substitute
information in the Freddie Mac Selling and Loan Product Advisor Guides and or related re-
lease notes or supplements. Always check for Freddie Mac, ServiSolutions or ADFA an-
nouncements and updates for current underwriting guidelines, changes and/or updates).
Dollar-per-Dollar Tax Credit
MCC is a Self-Reporting Tax
REVISED 6/10/2020 16 ADFA
REVISED 6/10/2020 17 ADFA
REVISED 6/10/2020 18 ADFA
REVISED 6/10/2020 19 ADFA
REVISED 6/10/2020 20 ADFA
ARKANSAS DEVELOPMENT FINANCE AUTHORITY
2019 FREDDIE MAC INCOME LIMITS FIPS 2019
5-digit key
County Name
2019 Area Median Income (AMI)
Low-income - 80% AMI
05001 Arkansas $52,100 $41,680
05003 Ashley $52,100 $41,680
05005 Baxter $52,100 $41,680
05007 Benton $68,600 $54,880
05009 Boone $52,100 $41,680
05011 Bradley $52,100 $41,680
05013 Calhoun $52,100 $41,680
05015 Carroll $52,800 $42,240
05017 Chicot $52,100 $41,680
05019 Clark $55,600 $44,480
05021 Clay $52,100 $41,680
05023 Cleburne $57,000 $45,600
05025 Cleveland $51,000 $40,800
05027 Columbia $55,100 $44,080
05029 Conway $53,600 $42,880
05031 Craighead $53,100 $42,480
05033 Crawford $52,500 $42,000
05035 Crittenden $65,200 $52,160
05037 Cross $52,100 $41,680
05039 Dallas $52,100 $41,680
05041 Desha $52,100 $41,680
05043 Drew $52,100 $41,680
05045 Faulkner $69,800 $55,840
05047 Franklin $50,700 $40,560
05049 Fulton $52,100 $41,680
05051 Garland $60,000 $48,000
05053 Grant $69,800 $55,840
05055 Greene $56,500 $45,200
05057 Hempstead $52,100 $41,680
05059 Hot Spring $54,000 $43,200
05061 Howard $52,100 $41,680
05063 Independence $52,100 $41,680
05065 Izard $52,100 $41,680
05067 Jackson $52,100 $41,680
05069 Jefferson $51,000 $40,800
05071 Johnson $52,100 $41,680
05073 Lafayette $52,100 $41,680
05075 Lawrence $52,100 $41,680
05077 Lee $52,100 $41,680
05079 Lincoln $51,000 $40,800
05081 Little River $57,200 $45,760
05083 Logan $52,100 $41,680
05085 Lonoke $69,800 $55,840
05087 Madison $68,600 $54,880
REVISED 6/10/2020 21 ADFA
05089 Marion $52,100 $41,680
05091 Miller $57,200 $45,760
05093 Mississippi $52,100 $41,680
05095 Monroe $52,100 $41,680
05097 Montgomery $52,100 $41,680
05099 Nevada $52,100 $41,680
05101 Newton $52,100 $41,680
05103 Ouachita $52,100 $41,680
05105 Perry $69,800 $55,840
05107 Phillips $52,100 $41,680
05109 Pike $52,100 $41,680
05111 Poinsett $53,100 $42,480
05113 Polk $52,100 $41,680
05115 Pope $53,600 $42,880
05117 Prairie $52,100 $41,680
05119 Pulaski $69,800 $55,840
05121 Randolph $52,100 $41,680
05125 Saline $69,800 $55,840
05127 Scott $52,100 $41,680
05129 Searcy $52,100 $41,680
05131 Sebastian $52,500 $42,000
05133 Sevier $53,600 $42,880
05135 Sharp $52,100 $41,680
05123 St. Francis $52,100 $41,680
05137 Stone $52,100 $41,680
05139 Union $53,200 $42,560
05141 Van Buren $52,100 $41,680
05143 Washington $68,600 $54,880
05145 White $56,200 $44,960
05147 Woodruff $52,100 $41,680
05149 Yell $52,100 $41,680
ARKANSAS DEVELOPMENT FINANCE AUTHORITY
2019 FREDDIE MAC INCOME LIMITS FIPS 2019
5-digit key
County Name
2019 Area Median Income (AMI)
Low-income - 80% AMI
REVISED 6/10/2020 22 ADFA
CONTACT INFORMATION
Compliance Team Email Phone
Denise Wells, Compliance Manager [email protected] (501) 682-5466
Dean Norman, Underwriter [email protected] (501) 682-5935
Virginia Wright, Underwriter [email protected] (501) 682-5923
Leslie Quisenberry, Underwriter [email protected] (501) 682-5930
Outreach Team / Training
Tim Wooldridge, Director of Outreach, NEA [email protected] (870) 926-8758
Kyle Putman, NWA Outreach [email protected] (501) 551-1276
Issac Morales, Central & South Outreach [email protected] (501) 765-6543
Communication & Marketing
Derrick Rose, Public Information Manager [email protected] (501) 682-5904
Homeownership Division
Robert Arrington, Director of
Homeownership & Public Finance [email protected] (501) 682-5900
MITAS Website / Reservation System https://adfa.mitas.com/mitas
General Ongoing File Reservation
Questions [email protected]
ARKANSAS DEVELOPMENT
FINANCE AUTHORITY HOMEOWNERSHIP DIVISION
1 Commerce Way, Suite 602
Little Rock, AR 72202
(501) 682-5900
