Iowa’s Homebuyer Assistance: Down Payment and Closing Costs Programs
Buying a home can be both exciting and overwhelming, but the Iowa Finance Authority is here to make it easier for you. We offer down payment and closing cost assistance programs that work in conjunction with our mortgage programs, making homeownership in Iowa affordable and straightforward.
FirstHome Program: Your Gateway to Homeownership
The FirstHome program provides you with two options to ease your path to homeownership:
- Down Payment and Closing Costs Assistance Grant: This option offers a $2,500 grant to help cover your down payment and closing costs.
- 2nd Loan Program Loan: Alternatively, you can opt for a loan of up to 5% of the home’s sale price, with no maximum limit. This loan is repayable at the time of sale, refinance, or when your first mortgage is paid in full. The best part? No monthly payments are required!
Important Notes: Please keep in mind that you cannot combine FirstHome down payment and closing costs options with Homes for Iowans down payment and closing costs options.
FirstHome Eligibility Requirements
To participate in the FirstHome program, you must meet the following criteria:
- Household Income Limit: The maximum household income limits vary by county, ranging from $95,200 to $115,400 for a household of two.
- Home Purchase Price Limit: The home’s purchase price must not exceed $481,000. However, in targeted areas, this limit can go up to $588,000. You can use our Eligibility Quick Check to determine if your prospective home is located in one of these targeted areas.
- Real Estate History: You must be a first-time homebuyer, which means you have not owned your primary residence in the last three years. Alternatively, you can be a military member with a discharge other than dishonorable and have not previously used a mortgage revenue bond program like FirstHome to finance a home purchase. Another option is purchasing a home in a Targeted Area (use the Eligibility Quick Check to check eligibility).
- Occupancy: You must occupy the purchased home as your primary residence within 60 days of closing.
- Credit Score: All loans require a minimum credit score of 640. For cases where the borrower has no credit score, non-traditional credit documentation is allowed in accordance with agency guidelines for the loan type.
- Debt-to-Income Ratio: The maximum debt-to-income ratio allowed is 50% with an approve/eligible status (Manual underwriting remains at 45%).
Getting Started with FirstHome
If you’re ready to take the first step towards homeownership, explore the possibilities with our FirstHome program. Your journey to owning a home in Iowa is just ahead.
First Homes Ahead: Your Path to Homeownership Begins Here
