First-Time Home Buyer Programs in Iowa

Iowa Finance Authority (IFA) Programs:

FirstHome Program:

Eligibility: Targets first-time homebuyers (no homeownership in the past three years), veterans with honorable discharge not previously using a similar program, or buyers in targeted areas.
Offerings: Provides a 30-year fixed-rate mortgage (FHA, VA, USDA, or conventional) with below-market rates and down payment assistance options of a $2,500 grant or up to 5% of the purchase price as a second loan (no interest, repayable upon sale or refinance).
Requirements:

• Income must not exceed county-specific limits (e.g., $96,500-$131,790 depending on household size and county as of 2025).
• Minimum credit score of 640 (non-traditional credit allowed per loan guidelines if no score).
• Debt-to-income ratio capped at 50% (45% with manual underwriting).
• Homebuyer education course required for conventional loan borrowers.

Homes for Iowans Program:

Benefits: Offers a 30-year fixed-rate mortgage for first-time or repeat buyers with up to 5% of the purchase price as a second loan for down payment and closing costs (no interest, repayable upon sale or refinance).
Eligibility: Income limit of $152,600 (or 80% AMI for conventional loans); purchase price limit of $481,000 (non-targeted areas) or $588,000 (targeted areas).

Military Homeownership Assistance:

Description: Provides a $5,000 grant for down payment and closing costs to eligible veterans, active-duty military, or surviving spouses; combinable with FirstHome or Homes for Iowans mortgages.
Requirements: Service eligibility includes 90+ days active duty during specific periods (e.g., post-9/11); must be paired with an IFA mortgage.

Local Programs:

Des Moines

Des Moines Homebuyer Assistance: Offers forgivable loans or grants through nonprofit partners (e.g., HOME, Inc., Neighborhood Finance Corporation) up to $15,000 for down payment and closing costs; income typically capped at 80% AMI.

Cedar Rapids

First Time Home Buyer Program: Provides up to $14,999 as a forgivable loan (forgiven after 5 years) for down payment and closing costs; income must be below 80% AMI; applications open annually in March.

Iowa City

Down Payment Assistance: Offers up to $24,999 as a 10-year forgivable loan for first-time buyers; income limited to 80% AMI; must use GreenState or Hills Bank financing.

Additional Information:

• Mortgage Credit Certificate (MCC): Offers a federal tax credit up to $2,000 annually on mortgage interest paid; available with IFA mortgages; funding may be limited.
• USDA Loans: Zero-down payment for rural Iowa properties; income limits apply.
• VA Loans: Zero-down payment for eligible veterans or active military.
• FHA Loans: Minimum 3.5% down payment, suitable for credit scores as low as 580 (10% if below 580).