Iowa FirstHome Plus Program

The Iowa FirstHome Plus Program, managed by the Iowa Finance Authority (IFA), is an enhanced version of the FirstHome Program. It offers both affordable mortgage options and additional financial assistance to help first-time homebuyers cover the upfront costs associated with purchasing a home. This program is designed to make homeownership more attainable for eligible Iowa residents.

Benefits

Provides 30-year fixed-rate mortgages with competitive interest rates, ensuring stable and predictable monthly payments.
Offers financial assistance for down payments and closing costs, reducing the initial financial burden of buying a home.
Assistance is available in the form of a grant or forgivable loan, depending on program terms and eligibility.
Supports first-time homebuyers as well as individuals purchasing in federally designated targeted areas.
Can be combined with other IFA programs for additional financial flexibility.

Eligibility Requirements

Applicants must be first-time homebuyers or have not owned a primary residence in the past three years, unless purchasing in targeted areas.
Income limits apply and vary by household size and the location of the property being purchased.
The property must be located in Iowa and used as the buyer’s primary residence.
A minimum credit score of 640 is required, with lender-specific underwriting criteria also applying.
Completion of a homebuyer education course is required to ensure participants are prepared for the responsibilities of homeownership.

Additional Information

The Iowa FirstHome Plus Program is an invaluable resource for first-time buyers seeking financial assistance to make homeownership possible. By reducing upfront costs and offering affordable mortgage options, this program helps individuals and families secure stable housing while building long-term equity. Administered by the Iowa Finance Authority, the FirstHome Plus Program supports sustainable housing solutions and strengthens communities across Iowa.

Frequently Asked Questions About Our Program

What is the Iowa FirstHome Plus Program?

The Iowa FirstHome Plus Program, offered by the Iowa Finance Authority (IFA), provides down payment and closing cost assistance to eligible first-time homebuyers purchasing a primary residence in Iowa. This assistance aims to make homeownership more accessible by reducing upfront costs.

Who is eligible for the FirstHome Plus Program?

Eligibility is primarily for first-time homebuyers, defined as individuals who have not owned a primary residence in the past three years. Exceptions include active-duty military personnel, veterans, and buyers purchasing homes in targeted areas. Applicants must also meet specific income and purchase price limits, which vary by county and household size.

What types of down payment assistance are available through the FirstHome Plus Program?

The program offers two forms of assistance: a $2,500 grant and a second loan of up to 5% of the home's sale price with no maximum. The grant does not require repayment, while the second loan is repayable upon sale, refinance, or when the first mortgage is paid in full, with no monthly payments required.

Are there income and purchase price limits for the FirstHome Plus Program?

Yes, the program has specific income and purchase price limits that vary by county and household size. These limits are designed to assist low- to moderate-income families in achieving homeownership.

Is homebuyer education required for the FirstHome Plus Program?

Yes, at least one borrower must complete a homebuyer education course prior to closing. This requirement ensures that buyers are well-prepared for the responsibilities of homeownership.

What credit score and debt-to-income ratio are required for the FirstHome Plus Program?

Applicants must have a minimum credit score of 640. The maximum debt-to-income ratio is 45%.

Can the FirstHome Plus Program be combined with other assistance programs?

Yes, the FirstHome Plus Program can be combined with other down payment and closing cost assistance programs, including the Military Homeownership Assistance Program, which provides a $5,000 grant to eligible service members and veterans.

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Is there a recapture tax associated with the FirstHome Plus Program?

Borrowers who use the FirstHome Plus Program may be subject to a federal recapture tax if they sell their home within nine years, experience a significant increase in income, and have a gain on the sale. However, if required to pay the recapture tax, IFA will reimburse the actual amount paid to the IRS.

What types of properties are eligible for the FirstHome Plus Program?

Eligible properties include single-family homes, townhomes, and condominiums that will serve as the borrower's primary residence. The property must meet purchase price limits set by the program.

Is mortgage insurance required with the FirstHome Plus Program?

Mortgage insurance requirements depend on the type of first mortgage loan selected. For instance, conventional loans with less than a 20% down payment typically require private mortgage insurance (PMI).

Can the FirstHome Plus Program be used for new construction homes?

Yes, the program can be applied to both newly constructed and existing homes, provided all other program criteria are met.

Are there occupancy requirements for the FirstHome Plus Program?

Yes, the property purchased must be occupied as the borrower's primary residence throughout the term of the mortgage.

Is there a prepayment penalty for loans under the FirstHome Plus Program?

No, there is no prepayment penalty. Borrowers can pay off their mortgage early without incurring additional fees.

What documentation is required to apply for the FirstHome Plus Program?

Applicants will need to provide proof of income, employment, credit history, and completion of the required homebuyer education course, among other standard loan application documents.

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Are there any fees associated with the FirstHome Plus Program?

Standard loan fees, such as origination and processing fees, may apply. It's important to discuss all potential fees with your lender to understand the total cost of the loan.

Is the FirstHome Plus Program available statewide?

Yes, the FirstHome Plus Program is available throughout Iowa, but income and purchase price limits vary by location.

Can the FirstHome Plus Program assist with closing costs?

Yes, the down payment assistance options available through the FirstHome Plus Program can be used to cover both down payment and closing costs, helping to reduce the upfront expenses of purchasing a home.

What is the process to apply for the FirstHome Plus Program?

To apply, borrowers should contact an IFA-approved lender who will guide them through the application process, including verifying eligibility, assisting with necessary documentation, and explaining program requirements.

Are there specific loan types available through the FirstHome Plus Program?

The FirstHome Plus Program offers various loan options, including conventional, FHA, VA, and USDA loans, providing flexibility to suit different borrower needs.

Are there any post-purchase requirements for the FirstHome Plus Program?

While there are no specific post-purchase requirements, borrowers are encouraged to maintain their home and finances responsibly to ensure successful long-term homeownership.