Arkansas mortgage laws explained: from closing to foreclosure
Arkansas keeps dower and curtesy alive, protects an unlimited-value homestead measured in acres, and requires a foreclosure bid of at least two-thirds of appraised value — old-fashioned rules that still shape every mortgage signed in the state. This page walks the Arkansas-specific rules in the order a borrower meets them: closing, spousal and homestead rules, costs at recording, prepayment, predatory-lending limits, licensing, disclosures and, at the end, default.
| Closing practice | Title company closing state |
|---|---|
| Community property | No — common-law (separate property) state |
| Mortgage recording tax | Arkansas has no mortgage tax and no intangible tax on the note; the mortgage is recorded with the county circuit clerk for a per-page fee. |
| Transfer tax (deed) | Arkansas levies a real property transfer tax of $3.30 per $1,000 of consideration (0.33%), customarily paid by the seller unless the contract says otherwise. |
| Usury ceiling | Arkansas is a genuine usury state: Amendment 89 to the state constitution caps most loans at 17% per year (consumer loans are capped lower), and the cap applies to business-purpose loans by non-bank lenders. |
| Foreclosure | Judicial or non-judicial · 3 to 5 months to sale · deficiency: allowed |
Who closes the loan in Arkansas
Arkansas closings are conducted by title companies and their closing agents; an attorney is not required, although lenders often have counsel prepare or review the mortgage and deed because the Arkansas Supreme Court restricts document preparation by non-lawyers to standardized forms. Funding is wet, with disbursement on the day of closing. Title premiums and closing fees are among the lower in the South.
Spouses, community property and the homestead
Arkansas is a separate-property state that, unusually, still recognizes dower and curtesy (Ark. Code § 28-11-301 et seq.), so a spouse who is not on title must sign the mortgage to release those inchoate rights or the lender’s lien is subject to them. Tenancy by the entirety is available to married couples, and a joint deed to spouses is generally presumed to create it. Survivorship between unmarried co-owners must be stated expressly.
Arkansas protects the homestead by constitution (Art. 9, §§ 3-5): up to 80 acres outside a city (160 acres if worth no more than $2,500) or one acre in town, with a minimum of a quarter acre that is protected regardless of value — so within the acreage limits the equity protection is unlimited. The exemption does not bar foreclosure of a mortgage the owner signed, tax liens, or liens for labor and materials. For property taxes, Amendment 79 provides a homestead credit against the tax bill (increased several times, most recently to $425 per year — verify the current amount with your county) and caps annual assessment increases on a homestead at 5%, with a freeze for owners 65 or older or disabled.
Taxes and fees at recording
Arkansas has no mortgage tax and no intangible tax on the note; the mortgage is recorded with the county circuit clerk for a per-page fee. The state real property transfer tax of $3.30 per $1,000 (Ark. Code § 26-60-105) falls on the deed, not the loan, and is usually paid by the seller. A refinance therefore costs only recording fees.
Arkansas levies a real property transfer tax of $3.30 per $1,000 of consideration (0.33%), customarily paid by the seller unless the contract says otherwise.
Prepayment penalty law in Arkansas
Arkansas has no general statute forbidding prepayment penalties on residential mortgages; the Arkansas Home Loan Protection Act bars them on high-cost home loans and federal qualified-mortgage rules limit them elsewhere. A penalty must be written into the note to be collected. The Arkansas Constitution’s interest rate ceiling (Amendment 89) governs the rate, not prepayment terms — ask the Securities Department if a penalty looks out of line.
High-cost and predatory lending limits
Arkansas enacted the Arkansas Home Loan Protection Act (Ark. Code § 23-53-101 et seq.) in 2003, one of the Southern states to adopt a HOEPA-style statute. It defines high-cost home loans with APR and points-and-fees triggers patterned on federal law, forbids loan flipping without a tangible benefit to the borrower, bans financing of single-premium credit insurance, and requires the lender to verify ability to repay and to refer high-cost borrowers to counseling. The Securities Department enforces it against licensees.
Arkansas is a genuine usury state: Amendment 89 to the state constitution caps most loans at 17% per year (consumer loans are capped lower), and the cap applies to business-purpose loans by non-bank lenders. Federally insured institutions are preempted, which is why Arkansas hard money often comes from banks or out-of-state lenders structuring around the cap.
Who regulates mortgage lenders in Arkansas
Mortgage lenders, brokers, servicers and loan officers are licensed by the Arkansas Securities Department under the Arkansas Fair Mortgage Lending Act (Ark. Code § 23-39-501 et seq.), administered through NMLS. Banks, savings associations and credit unions are exempt, and the Act exempts a person who makes a limited number of loans from their own funds or sells their own home with owner financing — check the statute for current thresholds. Complaints and license lookups go through the Department’s Mortgage Division.
What Arkansas adds to the federal disclosures
Arkansas adds no origination disclosure to TRID, but its Statutory Foreclosure Act of 1987 (Ark. Code § 18-50-101 et seq.) gives borrowers process rights in a non-judicial sale: the mortgagee must record and mail a notice of default and intention to sell, the sale cannot occur until at least 60 days later, the borrower may cure at any time before the sale, and the property may not be sold for less than two-thirds of its appraised value. Only lenders authorized to do business in the state may use the statutory (non-judicial) route; others must foreclose in court.
Default and foreclosure: the Arkansas path
Arkansas uses a judicial or non-judicial process and a typical uncontested case reaches a sale in 3 to 5 months. There is no right of redemption after a statutory (non-judicial) sale. Arkansas lenders may pursue a deficiency after either type of foreclosure. The full timeline, redemption and mediation rules are on foreclosure in Arkansas; the investor view — usury, licensing exemptions, recovery speed — on hard money in Arkansas.
Frequently asked questions
Do I need a lawyer to close a mortgage in Arkansas?
Arkansas closings are conducted by title companies and their closing agents; an attorney is not required, although lenders often have counsel prepare or review the mortgage and deed because the Arkansas Supreme Court restricts document preparation by non-lawyers to standardized forms. Whatever the local custom, the federal Closing Disclosure still has to arrive three business days before signing, and the borrower may bring their own attorney.
Does Arkansas allow prepayment penalties on home loans?
Arkansas has no general statute forbidding prepayment penalties on residential mortgages; the Arkansas Home Loan Protection Act bars them on high-cost home loans and federal qualified-mortgage rules limit them elsewhere. Whatever the state permits, the federal Closing Disclosure must state plainly whether the loan has a penalty.
What does Arkansas charge to record a mortgage?
Arkansas has no mortgage tax and no intangible tax on the note; the mortgage is recorded with the county circuit clerk for a per-page fee. Arkansas levies a real property transfer tax of $3.30 per $1,000 of consideration (0.33%), customarily paid by the seller unless the contract says otherwise.
Who licenses mortgage lenders in Arkansas?
Mortgage lenders, brokers, servicers and loan officers are licensed by the Arkansas Securities Department under the Arkansas Fair Mortgage Lending Act (Ark. Code § 23-39-501 et seq.), administered through NMLS. Every individual originator must also hold an NMLS identifier, printed on the application and the Loan Estimate; it can be checked on NMLS Consumer Access.
Federal layer: TILA / Reg Z · RESPA · TRID disclosures · ECOA · Fair Housing Act · all federal regulations. Buying here: first-time buyer programs in Arkansas.