An Arkansas LLC Can Never Hold a Homestead
Program and regulatory figures verified September 15, 2026. Details change; confirm your scenario with us.
Most articles about holding rental property in an LLC talk about liability. In Arkansas there is a concrete, constitutional consequence worth knowing first, and it shows up on the tax bill rather than in a lawsuit.
The homestead is a person's, not an entity's
Amendment 79 does not attach its better treatment to a house. It attaches it to "a taxpayer's homestead used as the taxpayer's principal place of residence." A limited liability company does not have a principal place of residence, so property it owns cannot qualify however the building is used.
Two consequences follow, and both land in the payment we underwrite. The assessment growth cap is the non-homestead 10% rather than 5%, and the state credit of not less than $300 never applies. Both are on the tax page.
Why investors do it anyway
Because for a property you never intended to live in, nothing has been lost. A rental was never going to be a homestead regardless of who held title. The point is not that the entity costs you something, it is that the friendlier Arkansas tax numbers in circulation were never available to this property, so they should not appear anywhere in your model.
Close in the entity
DSCR programs are built for entity ownership, so title goes into the LLC at the closing table rather than by a deed afterward. One conveyance rather than two. Expect a personal guaranty on most programs, and expect us to want the entity documents early, because entity paperwork delays more investor closings than underwriting does.
Where our advice stops
Whether to use an entity at all, how to structure it, and how it is taxed are questions for an Arkansas attorney and your CPA. We are the lender, we finance the structure you choose, and we will say early if a structure creates a financing problem.
How the loan works · What the exit looks like
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content, not a loan commitment and not legal or tax advice. County assessments, millage and reappraisal cycles change, and the figures here carry the date we verified them. Confirm current requirements with the county assessor, your CPA, or an Arkansas real estate attorney before you buy. Loans are subject to buyer and property qualification.