Iowa First-Time Homebuyer Programs

by The Lenders Network | First-time Homebuyers

first-time-homebuyer programs

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The Lowa Finance Authority has financial assistance programs available for low to median income first-time homebuyers who can afford a mortgage but need help with the down payment and closing costs.

FirstHome Program

The FirstHome program can either give you:

A down payment and closing cost assistance grant OR

a 2nd Loan program loan, not both.

Note: You cannot combine the FirstHome program with Homes for Iowans down payment and closing costs options.

FirstHome Down Payment and Closing Costs Assistance Options

  • GrantProvides home buyers with a $2,500 grant to assist with down payment and closing costs.
  • LoanProvides up to 5% of the home’s sale price or $5,000, (whichever is less) and is repayable at the time of sale, refinance, or the first mortgage is paid in full. No monthly payment is required.
  • Minority Down Payment Pilot ProgramThe new Minority Down Payment Assistance program offers eligible borrowers up to a $5,000 grant to be used for the down payment or closing costs when paired with the FirstHome program mortgage.

FirstHome Eligibility Requirements

  • Income limitMaximum household income limits vary by county and range from $79,500-$99,700 for a household of two.
  • Home purchase limitFrom $311,000 up to $381,000 in targeted areas
  • Real Estate HistoryMust be a first-time homebuyer (not owning your primary residence in the last three years.) ORA military member with a discharge other than dishonorable and not previously used a mortgage program such as FirstHome previously to purchase a home. OR

    Purchase a home in a Targeted Area (please use the eligibility checker to determine if you’re purchasing in a Targeted Area).

  • OccupancyThe home must be occupied as a primary residence by the buyer within 60 days.
  • Credit ScoreAll loans are subject to a 640 minimum credit score.
  • Debt-to-income Ratio45% maximum debt-to-income ratio.

 

Homes for Iowans

The Homes for Iowans program gives you the option of a:

Grant to assist with the down payment and closing costs OR

a loan from the 2nd Loan program, not both.

Note: You cannot combine Homes for Iowans down payment and closing costs options with the FirstHome program.

Homes for Iowans Down Payment and Closing Costs Assistance

  • GrantProvides home buyers with a $2,500 grant to assist with down payment and closing costs.
  • LoanThe 2nd Loan program offers a loan of up to 5% of the home’s sale price or $5,000, (whichever is less) and is repayable at the time of sale, refinance, or the first mortgage is paid in full.

Homes for Iowans Eligibility Requirements

  • Income limit – $139,580
  • Home price limit – $381,000

 

  • Real estate historyHomes for Iowans are available to first-time and repeat homebuyers who are purchasing a primary residence in Iowa.
  • OccupancyThe home must be occupied by the buyer as a primary residence within 60 days of closing.
  • Credit scoreMinimum 640 credit score.
  • Debt-to-Income ratio45% maximum debt-to-income ratio.

Military Homeownership Assistance Program

The Military Homeownership Assistance Program provides eligible service members and veterans a $5,000 grant for down payments and closing costs on qualifying homes.

 

National First-Time Homebuyer Loans

  • FHA Loans – FHA home loans are very popular with first-time homebuyers cause they require a 580 credit score with just a 3.5% down payment. Debt-to-income ratios up to 50% are allowed making them perfect for low-income borrowers.
  • Conventional Loans – Conventional loans require a 620 credit score and a 5% to 20% down payment. If you put 20% or more down, mortgage insurance will not be required.
  • USDA Loans – USDA mortgage loans are for low-to-median income borrowers buying a home located in a USDA-eligible rural area. They provide 100% financing with a 620 or higher credit score. Mortgage insurance is required but the rate is the lowest of any type of mortgage program available.
  • VA Loans – Veterans of the U.S. military may be eligible for a VA home loan. No down payment or mortgage insurance is required and veterans with a 580 to 620 credit score are eligible.
  • HomeReady and Home Possible Loans – Freddie Mac and Fannie Mae created the HomeReady and Home Possible loan programs for low-income first-time homebuyers whose income does not exceed 100% of the area median income requiring just a 3% down payment and a 620 credit score.

 

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