Are Prepayment Penalties allowed on DSCR Loans in Arkansas?

[Robin Simon]

Prepayment Penalty Rules for DSCR Loans in Arkansas

Prepayment Penalties are Fully Allowed with no restrictions for DSCR Loans in Arkansas. Arkansas law allows prepayment penalties on loans made by "exempt entities", which is universally interpreted to include DSCR Lenders, under § 23-39-502(9)(B)(vi). While § 23-39-513 limits prepayment penalties to three years for some licensed lenders, those rules do not apply to exempt institutions, which include banks, credit unions, and certain mortgage companies. As such, DSCR Lenders can typically offer all standard prepayment penalty options such as Descending Prepay Penalties (i.e. “5/4/3/2/1”), Flat Prepay (i.e. 5/5/5) or other tailored structures in the Natural State.

FULL Complete 2026 Guide To DSCR Loan Prepayment Penalties

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