Down Payment Assistance Programs for First-Time Homebuyers in Iowa

Iowa is popular for its landscapes and rich agricultural heritage. The attractions with the likes of Field of Dreams, along with Amana Colonies are a testament to it rich, unique history.

However, the state faces several challenges with affordable housing being one of them. The high prices and limited inventory are making it difficult for first-time homebuyers to enter the market.

The state of Iowa along with various organizations is offering down payment assistance programs that facilitate deserving buyers, and promote a homeownership culture.

Looking for Assistance in a Specific Part of Iowa?

Do you want to buy a home or property in Iowa but are worried about the down payment and closing costs? Well, you are not alone as many people are finding it difficult to afford. Here is an in-depth look into some payment assistance programs available throughout the state.

Down Payment Assistance In Iowa

As mentioned before, Iowa is experiencing an affordable health crisis. The state saw a median home price reach  $244,400 in July 2024, which was a 5.5% increase from the previous year. The high costs mean that individuals have to pay high down payments which can be an overwhelming prospect.

The state of Iowa and other organizations are addressing the problems by offering down payment assistance programs that help first-time buyers overcome financial barriers. Here is an overview of some programs:

Iowa Finance Authority FirstHome Program

The Iowa Finance Authority FirstHome Program in Iowa provides financial assistance via favorable mortgage terms. The initiative helps first-timers to make homeownership accessible in a competitive market.

Fundamentals

• Assistance Type: Grant or repayable second loan
• Sponsor: Iowa Finance Authority
• Assistance Amount: 5% of the home’s sale price (loans)/$2,500 (at maximum) as grants

Eligibility Requirements

• The purchased home should be the applicant’s primary residence
• The applicant has to occupy the purchased property within 60 days of closing.
• Applicants should have a first-time homebuyer status, meaning they haven’t owned a primary residence in the past three years.
• Military veterans with an honorable discharge or those purchasing in a targeted area quality for the grants.
• Borrowers should have a minimum credit score of 640.
• The household income should not be higher than the specific limits. The income limits for eligibility are as follows:
• 1-person household: $37,200
• 2-person household: $42,500
• 3-person household: $47,800
• 4-person household: $53,100
• 5-person household: $57,350
• 6-person household: $61,600
• 7-person household: $65,850
• 8-person household: $70,100

Homes for Iowans Program

The Homes for Iowans Program provides coverage on down payment and closing costs for first-time and repeat homebuyers in Iowa.

Fundamentals

• Assistance Type: Grant
• Sponsor: Iowa Finance Authority
• Assistance Amount: Between $2,500 to $5,000

Eligibility Requirements

• Applicants’ household Income Limit should be  $139,580 or less.
• The home purchase price Limit should not exceed $381,000.
• Applicants should have a minimum credit score of 640.
• Buyers must occupy the home as their primary residence within 60 days of closing.
• Applicants with a debt-to-income ratio of no higher than 45% are not eligible for the grant.

Iowa Down Payment Assistance Program FAQs

Who is eligible for down payment assistance in Iowa?

Eligibility typically includes first-time homebuyers who have not owned a primary residence in the last three years, military veterans, and those purchasing in targeted areas. Income limits and credit score requirements (minimum of 640) also apply.

How much financial assistance can I receive?

Assistance amounts vary by program. For example, the FirstHome Program offers up to $2,500, while the Homes for Iowans Program can provide a second loan of up to 5% of the purchase price or $5,000 for certain low-income households.

Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation.