Unlocking Homeownership with Cedar Rapids’ First Time Home Buyer Program
Cedar Rapids’ First Time Home Buyer Program: Paving the Way to Affordable Homeownership. In Cedar Rapids, the dream of owning your first home can now become a reality, thanks to the First Time Home Buyer Program offered by the City. This program is designed to provide invaluable down payment assistance, empowering individuals and families to take that monumental step toward homeownership.
Available Assistance
The First Time Home Buyer (FTHB) Program extends a generous helping hand to eligible prospective homebuyers by offering financial assistance ranging from $1,000 to $5,000. These funds are specifically allocated to ease the financial burden associated with the down payment and closing costs linked to the purchase of a home. Notably, this assistance is provided in the form of a 5-year, forgivable loan, making the transition to homeownership more manageable.
Eligibility Requirements
To qualify for the First Time Home Buyer Program, certain criteria must be met:
- Applicants must be first-time homebuyers, meaning they have not owned a home within the past three years.
- An acceptable mortgage, often referred to as a “Qualified Mortgage,” must be secured. This includes meeting additional requirements such as having no non-occupying co-signers or co-borrowers and obtaining adjustable-rate mortgages (ARMs) with a minimum term of 10 years.
- Income and asset requirements must also be met. Households must adhere to maximum housing and debt-to-income ratios of 31 percent and 43 percent, respectively. Additionally, applicants’ assets, such as checking and savings accounts, must not exceed $15,000 in non-retirement funds. Depending on these assets, applicants will be required to contribute between one and three percent of the sales price towards the down payment.
- Completion of a homebuyer education course is mandatory. All applicants must attend and complete an in-person or online, HUD-approved homebuyer education course before applying for down payment assistance. The course and the agency conducting it must be “HUD-approved” to meet the program’s requirements.
Property Guidelines
While the First Time Home Buyer Program opens doors to homeownership within the City of Cedar Rapids, certain property guidelines must be adhered to:
- Eligible homes must be located within the city limits of Cedar Rapids. Properties situated in the 100-year floodplain are not eligible for assistance.
- Homes must be either owner-occupied or vacant, not serving as current rental properties with tenants. Single-family dwellings and condominium units are eligible, but mobile home purchases do not qualify.
- Thorough inspections by City staff ensure that homes meet Housing Quality Standards, focusing on health and safety requirements.
- The purchase price of homes must not exceed $135,000 for single-family dwellings, ensuring affordability for program participants.
Income Limits
Income limits are defined on a household basis, encompassing all earnings received by household members aged 18 or older who will be residing in the home. Here are the income limits based on household size:
- 1 person household: $44,750
- 2 person household: $51,150
- 3 person household: $57,550
- 4 person household: $63,900
- 5 person household: $69,050
- 6 person household: $74,150
- 7 person household: $79,250
The City of Cedar Rapids is dedicated to making homeownership a reality for those who might have thought it was out of reach. With the First Time Home Buyer Program, you can embark on your homeownership journey with confidence, knowing that the support you need is within your reach.
