How the Homestead Credit Impacts Your Escrow

Your first Arkansas County property tax bill after closing can raise questions. Where is the homestead credit, and will it lower your monthly mortgage payment? You want a clear answer and a simple plan so you do not overpay or wait months for an adjustment.

In this guide, you will learn exactly where the homestead credit appears on an Arkansas County tax bill, how a lower tax amount affects your escrow payment, and when to contact your mortgage servicer with the right documents. You will also get a practical checklist you can use right away. Let’s dive in.

Find the homestead credit on your bill

Where to look on the Arkansas County bill

Most county tax bills follow a similar structure. When your bill arrives, review these sections:

• Property description and parcel number at the top.
• Assessed value, sometimes shown as market value and the assessed percentage.
• Exemptions and credits in their own section or line items. This is where you look for the homestead credit.
• Net assessed value and tax rates for the county, city, school district, and other taxing units.
• Total tax due with due dates, and any discounts or penalties.

Look for a line labeled “Homestead Credit,” “Homestead Exemption,” or similar wording. The bill should show the gross tax amount, minus the homestead credit, and then the new net tax due.

How it appears in dollars

The homestead credit usually shows as a dollar amount that reduces your tax liability. If you qualify for other exemptions, each one typically appears on its own line. The goal is to confirm the credit amount and the final net tax due so you know what your servicer should be paying from escrow.

If you do not see it

Wording and placement vary by county and year. If you do not see a clear homestead line on your bill, contact the Arkansas County assessor to request an itemized explanation or a corrected bill. Keep a copy of any written confirmation you receive.

How escrow changes when the credit applies

How your escrow was set up

At closing, your lender or servicer created an escrow account to collect monthly amounts for future property taxes and insurance. You should receive an initial escrow statement that shows:

• The projected annual payments for taxes and insurance.
• The starting escrow balance and cushion the servicer requires.
• Your monthly escrow payment.

Servicers must deliver this initial statement within a defined period after closing, and they must provide an annual escrow analysis that explains any payment changes.

When taxes drop, escrow needs drop

Once the homestead credit lowers your tax bill, future escrow needs drop too. This can lead to two outcomes:

• Your monthly escrow portion decreases after the servicer recalculates.
• Your account shows a surplus if the servicer already collected based on a higher tax estimate.

If a surplus is large enough, federal rules generally require the servicer to refund amounts above the allowed escrow cushion after analysis. The exact handling depends on your servicer’s policies and the timing of the analysis.

When servicers adjust your payment

Servicers typically update escrow in two ways:

1. At the regular annual escrow analysis.
2. With an interim review when they receive new, verifiable tax information.

If your servicer has an updated county tax bill or an assessor approval letter that clearly shows the homestead credit, they can recalculate your projected tax disbursements and adjust your monthly payment sooner.

What to do after you qualify

Step 1: Apply for homestead status

As soon as you establish the property as your primary residence, apply for the homestead credit with the Arkansas County Assessor. Some counties require a new application each year, while others keep your status on file. Check the county’s instructions.

Common documents the county may ask for include:

• A copy of your recorded deed or closing statement showing you as the owner.
• A valid photo ID with the property address.
• Proof of primary residency, such as a utility bill or voter registration.
• The county’s homestead application form.

Step 2: Get official county documentation

When the county approves your homestead status, request written proof. Acceptable items include an approval letter, a stamped or annotated tax bill that lists the homestead credit, or a corrected tax bill. Keep copies for your records.

Step 3: Notify your mortgage servicer

Do not wait for your servicer to discover the change on their own. As soon as you have county documentation, send it to your servicer and request an escrow review based on the new, lower tax amount.

Include the following details:

• Your mortgage account number and property address.
• Copies of the updated county tax bill showing the homestead credit or the assessor’s approval letter.
• A copy of your recorded deed or closing statement, if requested.
• A brief cover note that says you are requesting an escrow analysis using the updated tax figure.

Why notifying early helps

Early notification gives your servicer the documentation they need to run an interim escrow analysis. That can reduce the time you carry a higher monthly escrow payment and can speed up any eligible refund if a surplus exists.

What to expect from your servicer

After you send the documents, you can expect:

• Acknowledgment that your request was received. Timelines vary, so ask for confirmation.
• An interim escrow analysis and a revised monthly payment, or a note that the change will appear at your next annual analysis.
• If a refund is due above the allowed cushion, the servicer should issue it within the required timeframe under applicable rules.

If the servicer needs more information, they will reach out. Keep your documents handy so you can respond quickly.

What does not change

The homestead credit reduces property taxes. It does not change:

• Principal and interest on your mortgage.
• Homeowners insurance premiums unless your insurance changes separately.
• Private charges like HOA dues, special assessments, or street lighting districts.

If you see these items on your bill, do not expect the homestead credit to reduce them.

Common pitfalls to avoid

• Assuming the servicer has updated information. Counties or third-party data services may send bills to servicers, but it can take time. Proactively share your county documentation.
• Waiting until the next annual analysis. If you qualify now, request an interim review so you can benefit sooner.
• Sending partial documents. Include the updated tax bill or approval letter and your loan number, and keep copies of everything you submit.
• Overlooking special districts. Confirm which line items the homestead credit actually reduces, and which it does not.

Quick homeowner checklist

• Right after closing:
  • Apply for the homestead credit with the Arkansas County Assessor if you are eligible.
  • Save your recorded deed, Closing Disclosure, and any county correspondence.
• When approved by the county:
  • Get a stamped or updated tax bill or an approval letter that clearly shows the homestead credit.
  • Send copies to your mortgage servicer with your loan number and a written request for an escrow analysis.
• Expect next:
  • Servicer acknowledgment and either an interim adjustment or a change at the next annual analysis.
  • A lower monthly escrow payment or a refund if a surplus exceeds the allowed cushion.
• Keep records:
  • County approvals, tax bills before and after, servicer escrow statements, and all emails or letters.

Ready for next steps?

If you are unsure whether your homestead credit has been applied or how it should change your escrow, you do not have to guess. Send your county documents to your servicer and ask for an escrow review. If you are planning a move or want help navigating the process around Little Rock, reach out to a local guide who treats your goals like their own. Dana Patterson‑Sims is here to help you make smart, confident decisions. Let me help you find your way home.

FAQs

How the homestead credit affects escrow refunds

• If the credit reduces taxes after your servicer collected at the higher amount, the next escrow analysis will determine if there is a surplus and whether a refund is due above the allowed cushion.

Whether the homestead credit lowers your whole payment

• It affects only the escrow portion that covers property taxes, not your principal and interest or unrelated items like HOA dues.

If servicers receive county updates automatically

• Servicers may receive tax data from the county or third-party sources, but delays are common, so you should provide the updated bill or approval letter directly.

Impact on special assessments or HOA fees

• Homestead credits typically apply to property taxes from taxing authorities and do not reduce separate charges like HOA fees or special assessments.

What to do if your servicer will not adjust

• Ask for the escrow analysis in writing, confirm which documents they used, and resubmit county proof; escalate a complaint with the servicer if needed, and consider contacting the CFPB, the county assessor, or an attorney for guidance.