Iowa FirstHome Program

The Iowa FirstHome Program, offered by the Iowa Finance Authority (IFA), is designed to assist first-time homebuyers in achieving homeownership. This program provides affordable mortgage options and down payment assistance to help eligible buyers overcome financial barriers and purchase their first home.

Benefits

Offers 30-year fixed-rate mortgages with competitive interest rates for stable and predictable monthly payments.
Provides optional down payment and closing cost assistance to reduce the upfront financial burden of purchasing a home.
Supports first-time homebuyers as well as eligible individuals purchasing in federally designated targeted areas.
Can be combined with other IFA programs for additional financial support.

Eligibility Requirements

Applicants must be first-time homebuyers, defined as individuals who have not owned a primary residence in the past three years, unless purchasing in targeted areas.
Income limits apply and vary based on household size and the property’s location.
The property must be located in Iowa and used as the buyer’s primary residence.
A minimum credit score of 640 is typically required, with adherence to lender-specific underwriting guidelines.
Participants must complete a homebuyer education course to prepare for the responsibilities of homeownership.

Additional Information

The Iowa FirstHome Program is a critical resource for first-time buyers seeking to achieve the dream of homeownership. By reducing upfront costs and offering competitive mortgage options, the program empowers eligible individuals and families to establish long-term stability and invest in their future. Administered by the Iowa Finance Authority, the FirstHome Program strengthens communities and promotes sustainable housing opportunities across the state.

Frequently Asked Questions About Our Program

What is the Iowa FirstHome Program?

The Iowa FirstHome Program, offered by the Iowa Finance Authority (IFA), provides affordable mortgage options to eligible first-time homebuyers purchasing a primary residence in Iowa. The program aims to make homeownership more accessible by offering competitive interest rates and down payment assistance.

Who qualifies as a first-time homebuyer under the FirstHome Program?

A first-time homebuyer is defined as an individual who has not owned a primary residence in the past three years. Exceptions include active-duty military personnel, veterans, and buyers purchasing homes in targeted areas.

What types of properties are eligible for the FirstHome 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.

Are there income and purchase price limits for the FirstHome 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 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 down payment assistance options are available with the FirstHome Program?

The FirstHome Program offers two down payment assistance options: 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.

What are the credit score and debt-to-income ratio requirements?

Applicants must have a minimum credit score of 640. The maximum debt-to-income ratio is 50% with an automated underwriting approval; manual underwriting remains at 45%.

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Can the FirstHome Program be combined with other assistance programs?

Yes, the FirstHome 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.

Is there a recapture tax associated with the FirstHome Program?

Borrowers who use the FirstHome 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.

Are there specific loan types available through the FirstHome Program?

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

What is the process to apply for the FirstHome 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 any fees associated with the FirstHome 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 mortgage insurance required with the FirstHome 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 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.

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Are there occupancy requirements for the FirstHome 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 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 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.

Are there any post-purchase requirements for the FirstHome 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.

Is the FirstHome Program available statewide?

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

Can the FirstHome Program assist with closing costs?

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