Friday, 30 October 2020

Iowa First-Time Homebuyer Programs

Iowa First-Time Homebuyer Programs
27 Mar
1:39

Are you a new homebuyer looking to purchase your first home in Iowa? If so, there are multiple first-time homebuyer programs available in the Hawkeye State. Ranging from down payment assistance to competitive interest rates that stretch your buying dollars, these programs address the roadblocks that new buyers sometimes face. If you’ve been dreaming of homeownership but think it may be out of reach, one of these programs may be able to bring you a step closer to your first home. Read on to learn more about Iowa’s first-time homebuyer programs.

Iowa first-time homebuyer programs

To qualify for any of the first-time homebuyer programs in the state, you must reside in Iowa. The programs are offered by multiple organizations. The Iowa Finance Authority (IFA) provides assistance statewide. The Southwest Iowa Planning Council (SWIPCO) offers a program to residents in southwestern counties, while the City of Sioux City and the City of Oskaloosa provide assistance to residents in their respective cities.

FirstHome Program

What is it?

  • A 30-year fixed-rate mortgage, including conventional loans and loans backed by the Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA) or U.S. Department of Agriculture (USDA) (25-year terms also available)
  • As low as 3% down payment allowed on conventional loans
  • Reduced or no mortgage insurance on conventional loans
  • Low mortgage rates
  • Low mortgage fees
  • Rates are not dependent on credit rating
  • Can request an Iowa Title Guaranty Owner’s Certificate for free. (This certificate provides protection in the event a title defect is identified.)

Requirements

  • Open to first-time buyers, qualified veterans or any buyer purchasing in a Targeted Area (defined by the federal government a qualified Census tract or an area of chronic economic distress).
  • Minimum credit score of 640 required (non-traditional credit documentation is permitted for buyers with no credit score, depending on loan type).
  • Income must be within program limits. Maximum income ranges between $73,100 and $100,050, depending on county and family size. (In Targeted Areas, the maximum income ranges between $87,720 and $121,800.)
  • Purchase price must be under $271,000 ($331,000 in targeted areas)
  • Single-family units only
  • Maximum debt-to-income (DTI) ratio of 45%
  • Must occupy the home as your primary residence immediately after closing
  • Homebuyer education may be required on conventional loans
  • Other requirements may apply, depending on loan type

How to apply

IFA works with local lenders to administer the FirstHome Program. To see if you qualify, use IFA’s Eligibility Quick Check. After confirming your eligibility, the next step is to contact an IFA Participating Lender in your area to apply.

FirstHome Plus Program

What is it?

  • Borrowers can pair the FirstHome Program loan (above) with a $2,500 Plus grant for down payment or closing cost assistance
  • All other benefits same as the FirstHome Program

Requirements

  • Borrowers cannot have used a Plus grant before
  • All other requirements same as the FirstHome Plus Program

How to apply

Borrowers must first be applying to the FirstHome Program. See if you qualify by using IFA’s Eligibility Quick Check. After confirming your eligibility, contact an IFA Participating Lender in your area to apply.

Homes for Iowans Program

What is it?

  • A 30-year, fixed-rate mortgage, including conventional loans and loans backed by the FHA, VA or USDA (25-year terms also available)
  • As low as 3% down payment allowed on conventional loans
  • Reduced or no mortgage insurance on conventional loans
  • Low mortgage rates
  • Low mortgage fees
  • Rates are not dependent on credit rating
  • Can request an Iowa Title Guaranty Owner’s Certificate for free (This certificate provides protection in the event a title defect is identified.)

Requirements

  • Open to first-time buyers and repeat buyers
  • Minimum credit score of 640 required. (Non-traditional credit documentation permitted for buyers with no credit score, depending on loan type.)
  • Income must be under $121,800
  • Purchase price must be under $331,000
  • Single-family units only
  • Maximum DTI ratio of 45%
  • Must occupy the home as your primary residence immediately after closing
  • Homebuyer education may be required on conventional loans
  • Other requirements may apply, depending on loan type

How to apply

IFA works with local lenders to administer Homes for Iowans. To see if you qualify, use IFA’s Eligibility Quick Check. After confirming your eligibility, the next step is to contact an IFA Participating Lender in your area to apply.

Homes for Iowans Plus Program

What is it?

  • Borrowers can pair the Homes for Iowans Program loan (above) with a $2,500 Plus grant for down payment or closing cost assistance
  • All other benefits same as the Homes for Iowans Program

Requirements

  • Borrowers cannot have used a Plus grant before
  • All other requirements same as the Homes for Iowans Program

How to apply

Borrowers must first be applying into the Homes for Iowans Program. See if you qualify by using IFA’s Eligibility Quick Check. After confirming your eligibility, contact an IFA Participating Lender in your area to apply.

Military Homeownership Assistance Program (MHOA)

What is it?

  • A $5,000 grant for down payment or closing costs
  • Is combined with an IFA first mortgage or other qualifying purchase
  • Eligible applicants can pair this with a FirstHome Plus or Homes for Iowans Plus grant for a total of $7,500 in assistance

Requirements

  • Open to eligible service members, veterans and surviving spouses
  • Single-family residences can include stick-built homes (wooden homes built largely on-site), modular homes, manufactured homes, condos and townhomes)
  • Multi-family units (up to four units) may be purchased if buyer will occupy one of the units
  • Must occupy the home as your primary residence immediately after closing
  • Qualifications for first mortgage apply
  • Cannot have previously received the Military Homeownership Assistance grant

How to apply

As of Oct. 23, 2018, all available funding for MHOA for the fiscal year ending June 30, 2019, has been reserved. Interested applicants can check their eligibility and then join a waitlist by applying directly with a participating lender.

You will need to provide proof of your military service, which typically includes a copy of DD Form 214, four months of leave and earnings statements (or other documentation) and a government-issued photo ID.

Mortgage Credit Certificate Program

What is it?

  • A federal tax credit for up to 50% of the annual mortgage interest, not to exceed $2,000
  • Can be combined with other IFA programs

Requirements

  • Buyer must occupy the home as their primary residence

How to apply

Interested buyers should contact a participating lender for further details.

Sioux City MyPad Down Payment Assistance Program

What is it?

  • Down payment and closing cost assistance between $1,000 and $14,999, dependent on borrower’s need and amount required for closing

Requirements

  • Open to first-time homebuyers and repeat buyers
  • Must be preapproved for a loan from a local lender within 10 miles of Sioux City
  • Cannot have a cosigner
  • Buyer and all household members must be U.S. citizens or legal resident aliens
  • Purchase price cannot exceed $128,000
  • The home must be your primary residence
  • Income must meet program guidelines. Maximum income ranges from $38,000 to $71,650, depending on family size
  • Property must be a single-family home in Sioux City
  • Homes that are winterized, for sale “as is,” or a short sale are ineligible
  • Buyers cannot own any other homes (unless a mobile home)

How to apply

Eligible applicants can print the MyPad application or email [email protected] to receive it by mail. Completed forms can be submitted in two ways:

  • Hand-delivered to City Hall, 405 6th Street, Room 305
  • Mailed to City Hall, Attn: Amy Keairns, PO Box 447, Sioux City, IA 51102

Once your application is reviewed, you will be contacted to schedule an appointment.
If you have any questions about the MyPad program, contact Amy Keairns at 712-279-6255.

Southwest Iowa Planning Council (SWIPCO) Home Ownership Assistance

What is it?

  • Down payment and closing cost assistance for up to 7% of the purchase price, not to exceed $7,000.
  • The first $4,000 is a five-year forgivable loan, forgiven at 20% per year, and is 100% forgiven after five years.
  • Any amount borrowed over $4,000 (up to $7,000), is repaid at 1% over no more than five years

Requirements

  • Open to first-time homebuyers and repeat buyers
  • Must reside in Cass, Fremont, Harrison, Mills, Montgomery, Page, Pottawattamie, or Shelby counties
  • Income must be within guidelines. Maximum income ranges from $58,480 to $86,200, depending on county and family size.
  • Must complete a homebuyer education course
  • Must have a signed purchase agreement

How to apply

To apply to the Home Ownership Assistance program, contact SWIPCO at 712-243-4196 or 1-866-279-4720 to request an application. Buyers must submit a signed purchase agreement with their application.

City of Oskaloosa First-Time Homebuyer Assistance

What is it?

  • Down payment and closing cost assistance for up to $3,500
  • No-interest loan repaid over 10 years

Requirements

  • Must be a first-time homebuyer or previous buyer who has not owned a home in Mahaska County in the past three years.
  • Buyer must contribute funds to match the amount of assistance received.
  • Must purchase a home in the City of Oskaloosa.
  • First mortgage must be from one of the following participating lenders:
    • Community 1st Credit Union
    • MidWestOne Bank
    • USDA Rural Development
  • Income must not exceed program guidelines. Maximum income allowed ranges from $82,700 to $109,150, depending on family size.

How to apply

Interested buyers apply directly with one of the participating lenders. There is a one-time processing fee of $100 for this program. For more details, contact the City Clerk/Finance Department at 641-673-9431.

National first-time homebuyer programs

In addition to the regional and statewide programs available in Iowa, residents can also pursue programs and loan products available on the national level.

These programs aim to meet the needs of new buyers by including features like low– or no–down payment requirements and flexible eligibility criteria.

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Alaya Linton
Alaya Linton |

Alaya Linton is a writer at MagnifyMoney. You can email Alaya here

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