Aid for First-Time Homebuyers: An Overview of Iowa’s Programs
Stepping into the journey of home ownership is an exhilarating venture, albeit one fraught with challenges such as accumulating sufficient funds for a down payment. To alleviate these hurdles, the Iowa Finance Authority provides affordable mortgage options and down payment assistance programs specifically catered to first-time homebuyers within the state. Moreover, the agency extends an assistance scheme to servicemembers and veterans regardless of whether they are purchasing for the first time or not. Leveraging these programs can expedite your transition to home ownership in Iowa.
An Overview of Loan Programs for First-Time Homebuyers in Iowa The Iowa Finance Authority (IFA) presents two principal home loan schemes: the FirstHome program, intended for first-time homebuyers, and the Homes for Iowans program, accessible to both first-time and repeat buyers. Both programs carry income and purchase price restrictions and necessitate a minimum credit score of 640, although alternative credit documentation may suffice in certain circumstances. The loan types under the FirstHome and Homes for Iowan programs include conventional loans, FHA, VA, and USDA loans.
Details of the IFA FirstHome Program Exclusively tailored for first-time homebuyers, the FirstHome program defines a first-time buyer as an individual who hasn’t owned a property in the preceding three years. Exceptions are in place for veterans or buyers in “targeted areas,” allowing them to qualify regardless.
The FirstHome program presents attractive below-market interest rates and fees on a range of mortgage types, and your credit score does not influence your rate. If your income falls below 80 percent of the Area Median Income (AMI), you could be eligible for reduced mortgage insurance premiums through this program. For a conventional FirstHome loan, you have the option to select a 25- or 30-year term.
The program sets forth the following borrower and property prerequisites:
- A down payment of 3 percent is required for a conventional loan
- A minimum credit score of 640
- A maximum debt-to-income ratio of 45 percent
- Completion of a homebuyer education course is compulsory for a conventional loan
- Compliance with IFA income limits, which oscillate between $86,900 to $109,000 for a two-person household, depending on the county
- The property must serve as the primary residence
- The property must be a single-family home
- The purchase price cannot exceed $349,000 in most regions, or up to $427,000 in targeted areas.
